Laws Every Landlord Should Know

Understanding both your rights as landlord and your tenants’ rights as paying occupants of your rental property is key to your success as a property manager. Before signing a lease and filling your property with tenants, you should make sure you understand the particulars of the following:

Federal Laws
The major federal laws affecting landlords are the Fair Housing Act and the Fair Credit Reporting Act.

The Fair Housing Act prohibits discrimination on the basis of race, color, national origin, religion, sex, familial status or handicap. Discrimination includes everything from denying a lease to setting higher rents for certain tenants, requiring additional deposits, providing different services, or falsely indicating that housing is unavailable. The Fair Housing Act also extends to advertising, prohibiting landlords from marketing their properties as exclusively available to a select group of people.

The Fair Credit Reporting Act governs the use of consumer credit information. Under this act, you must get a potential tenant’s permission to run a credit report, provide information on the credit agency you use, and inform him or her if information in the credit report causes you to deny tenancy.

State Laws
At the state level, laws typically govern practical matters, such as what rights and responsibilities tenants and landlords have, what terms and conditions can be set as part of a lease, how a lease may be terminated, and how evictions must be conducted.

In some states, there may be legal requirements that limit the size of the security deposit, or mandate that it be held by a neutral third party until the lease term ends. The conditions under which the landlord can use the security deposit are typically specified. In Michigan, for example, the owner must return the deposit at the end of the lease term unless the tenant left the property damaged beyond reasonable wear and tear or owes rent or utility payments.

Liability for Repairs
Tenants in almost every state have the right to a “fit and habitable” dwelling, which generally means the landlord must maintain the structure of the building and its electrical, heating and plumbing systems. Any major repairs tend to be the landlord’s responsibility, and failure to support appropriate living conditions may leave the owner or manager vulnerable or liable. States may include other specific factors as well, such as air conditioning repairs being mandatory for owners of units in Arizona.

The exception occurs when the tenants are responsible for damaging the building or system in question. If renters are irresponsible or actively destructive, then the landlord does not generally have to pay for repairs. At times, it can be difficult to determine exactly why something is breaking down, which is why it is so important to ensure that the status of vital systems is clear when tenants move in.

Beyond these core concerns, state and local building codes vary. As a general rule, anything that threatens safety may be the landlord’s obligation, but cosmetic repairs are not required.

Privacy and Access Rights
Typically, owners and managers can only enter the rental property in an emergency, to show it to prospective tenants, or to make needed repairs, unless invited. In some states, the rule concerning repairs also allows them to enter when assessing whether repairs are necessary.

Access is allowed in some states when the renter is absent for an extended period, generally at least a week. Except for emergencies, landlords typically cannot enter without tenants’ permission unless they give advance notice, generally at least 24 hours beforehand.

Terminating rental agreements and evictions
Landlords typically must begin terminating a lease by providing written notice, and can generally do so only if the renter has violated the law or the lease agreement. As long as the agreement itself is legal, violations such as failure to pay the rent or keeping a pet despite a no-pets clause are generally grounds for termination. Depending on the circumstances and the state’s laws, a notice of termination may simply inform the tenant they have a limited time to move out or present them a deadline to remedy lease violations, such as paying owed rent. Some states give landlords a choice whether or not to give tenants a second chance, while others may require it.

If tenants, once notified, fail to fix the problem or depart as directed, then an eviction can begin. Evictions cannot be performed in retaliation for an action of the tenant’s, generally, and failure to follow proper notification procedures or otherwise comply with the law could result in an eviction attempt failing. Landlords are not permitted to change locks or deactivate utilities in order to force tenants out.

If the property’s lease is monthly, then some states allow the landlord to terminate the agreement without a particular cause, typically requiring 30 or 60 days advance notice. Otherwise, it is generally only allowed if the terms and conditions have been violated.

Category: Ready to Rent: Tips & Tricks