Lawsuits and legal pitfalls can be a constant concern for rental property owners and managers, often leading to costly settlements and operational challenges. However, with the right knowledge and proactive steps, these risks can be avoided. Avoiding legal pitfalls starts with understanding the most common legal challenges rental property owners and managers face and applying industry best practices. This helps protect you and your properties while ensuring a smooth management process. In this guide, we’ll explore the common lawsuits and legal pitfalls rental property owners face and provide steps you can take to avoid them.
Common Legal Pitfalls in Property Management
In the rental real estate industry, several legal pitfalls can lead a property owner or manager into a lawsuit or legal nightmare. Here are the key reasons a rental property owner or manager ends up in court.
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:
- Providing a habitable living environment for tenants
- Responding to maintenance and repair requests quickly
- Adhering to local and federal housing and anti-discrimination laws
- Properly managing security deposits
- Following legal eviction processes
The reality is that if not taken seriously, landlords can violate a tenant’s rights in these areas in many ways. Refusing to lease to a disabled person, for example, or not handling a tenant’s personal belongings correctly during an eviction are two of many mistakes that can lead to costly lawsuits. A tenant also has a right to privacy, which requires a landlord to provide proper notice before entering their home or unit. Failing to do so can lead to serious legal consequences.
Negligent Maintenance and Repairs
Failing to provide proper maintenance and repairs is another legal pitfall tied to tenant rights. The law requires landlords to keep a rental property safe and habitable. Neglecting this can result in personal injury, illness, or damage to personal property, risking a lawsuit for the property owner.
Lease Disputes
Misleading lease documents heighten the potential for legal pitfalls. A lease is a contract outlining the terms under which one party agrees to rent an asset—the property—from another. A lease is a contract outlining the terms under which one party agrees to rent an asset—in this case, property—owned by another party. It guarantees the lessee, also known as the tenant, use of the property and guarantees the lessor (the property owner or landlord) regular payments for a specified period in exchange. When lease documents are vague, unclear, or not specific enough, misunderstandings and legal action can result.
Proactive Steps to Prevent Legal Issues
The good news is that there are many things a rental property owner or manager can do to prevent legal issues before they start. These include:
- Clear and Comprehensive Lease Documents: Ensure lease documents are legally sound and specify key terms. Go over the lease with tenants, then follow the terms closely and enforce them.
- Training on and Adherence to Fair Housing Laws: Stay up-to-date on local and federal housing regulations to understand your obligations under the law. Train on handling common issues in housing law disputes.
- Effective Communication and Documentation: Promote tenant satisfaction with consistent communication. Encourage feedback, handle maintenance and repair requests swiftly, and provide updates on work done on the property. Track all communications and agreements with tenants, keeping a professional demeanor.
- Proactive Maintenance: A proactive maintenance plan with a strict maintenance schedule can keep the property and your tenant safe.
- Fair Tenant Screening and Eviction Procedures: Use consistent and fair practices in tenant screening with comprehensive background checks. During an eviction, comply with state and local laws and handle handling of a tenant’s personal property properly.
Protect Your Business with Legal Precautions
Property owners and managers can avoid common legal pitfalls and lawsuits by staying proactive and implementing sound management strategies. If in doubt, seek legal advice to prevent a tenant taking legal action, ensuring you, your tenants, and your property are protected.
Need help ensuring your property management practices are legally sound? Contact property management experts in Signal Mountain at Real Property Management Your Home. Get in touch with us online or call 423-704-9944 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.
