Lawsuits and legal pitfalls can weigh down rental property owners and managers, often leading to costly settlements and unnecessary tension. Fortunately, with the right knowledge and proactive steps, these challenges can be avoided. Avoiding legal pitfalls starts with recognizing the legal hurdles rental property owners and managers face and adopting industry best practices. This allows you to protect you and your properties while maintaining smooth operations. Here, we’ll outline the most frequent lawsuits and legal pitfalls rental property owners face and provide actionable steps you can take to avoid them.
Common Legal Pitfalls in Property Management
In the rental real estate industry, certain legal pitfalls regularly pull a property owner or manager into a lawsuit or legal nightmare.
Violating Tenant’s Rights
One of the most common reasons a rental property owner or manager ends up in court is violating one or more of a tenant’s rights. Property owners are responsible for treating their residents fairly and equally and complying with fair housing laws. State and federal housing laws outline landlord responsibilities, which typically include:
- Ensuring a habitable living environment for tenants
- Responding promptly to maintenance and repair requests
- Adhering to local and federal housing and anti-discrimination laws
- Managing security deposits equitably
- Following legal eviction processes when necessary
Landlords can violate a tenant’s rights in numerous ways if not careful—refusing to lease to a disabled person or mishandling personal belongings during an eviction can spark costly lawsuits. The right to privacy also requires landlords to provide proper notice before entering, with failure leading to serious legal consequences.
Negligent Maintenance and Repairs
Failing to provide proper maintenance and repairs is another widespread legal pitfall tied to tenant rights. The law requires landlords to keep a rental property safe and habitable, and overlooking this can cause personal injury, illness, or damage to personal property, potentially dragging a property owner into a lawsuit.
Lease Disputes
A third common area with potential for legal pitfalls is unclear or misleading lease documents. A lease is a contract outlining the terms under which one party agrees to rent an asset—in this case, property—from another. It guarantees the lessee (the tenant) use of the property while ensuring the lessor (the property owner or landlord) regular payments for a specified period in exchange. When lease documents are vague, misunderstandings and legal action can result.
Proactive Steps to Prevent Legal Issues
The bright side is that rental property owners and managers can do plenty to prevent legal issues from arising. Consider these tactics:
- Clear and Comprehensive Lease Documents: Craft lease documents that are clear, complete, legally sound, and define key terms. Go over them with tenants to confirm understanding, then follow the terms closely and expect tenants to do the same.
- Training on and Adherence to Fair Housing Laws: Stay up-to-date on local and federal housing regulations to remain compliant. Know your obligations under the law and seek training to navigate housing law disputes confidently.
- Effective Communication and Documentation: Maintain regular, positive communication to enhance tenant satisfaction. Recognize tenant efforts, invite their feedback, and address maintenance and repair requests swiftly, offering updates on work done on the property. Log all communications and agreements with tenants, including calls, with a professional demeanor.
- Proactive Maintenance: Develop and adhere to a proactive maintenance plan. A strict maintenance schedule ensures safety for the property and tenants.
- Fair Tenant Screening and Eviction Procedures: Use fair, consistent practices for tenant screening, applications, and leasing. Conduct thorough screenings and background checks and verify references. For an eviction, follow state and local laws, including timelines, notices, and proper handling of a tenant’s personal property.
Protect Your Business with Legal Precautions
Property owners and managers must understand their obligations, take preventive measures, and implement sound management strategies to avoid common legal pitfalls and lawsuits. Seeking legal advice when uncertain or facing a tenant taking legal action is a smart step. This safeguards you, your tenants, and your property.
Need help keeping your property management legally sound? Contact your local property management experts in Hanover; Real Property Management Beacon’s experts are ready to support you. Get in touch with us online or call 603-448-8808 today.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.
