How to Avoid Legal Problems in Rental Property

Avoiding Legal problems

You’ve heard the old adage, “Hope for the best and prepare for the worst.”   When it comes to investing in rentals, most property owners are great at hoping for the best but then they forget the rest. Now more than ever if you own rental property without preparing for the many potential legal pitfalls associated with your investment, the risks can really cost you. With typical lawyers’ fees at over two hundred and fifty dollars per hour a single legal issue can wipe out the entire annual profit from a rental property.

With almost 30 years’ experience in this industry no one knows better how to reduce risk than Real Property Management. Here are the 10 ways to prepare yourself, protect yourself, and do your best to avoid legal hassles as a landlord.

1. The Americans with Disabilities Act requires that you not discriminate against potential tenants with disabilities and that you allow the tenants to install adequate access features.  But you can also require them to put the property back to its original condition.  Plus, you may never restrict or charge for service animals, so be accommodating.

2. The Fair Housing Act and common decency prevent property owners from making housing decisions based on ace, color, sex, national origin, religion, handicap or familial status. States and localities can add additional protected classes and violations can cost tens upon thousands of dollar’s.  So ensure that you be fair.

3. Habitability laws vary from region to region and require that your rental property provide a safe, comfortable living environment for tenants. If you neglect these items, respond slowly or ineffectively, or require tenants to pay for them you can end up with landlord-tenant disputes, lawsuits or costly government actions. So be safe.

4. Some inexperienced property owners may try to cut costs by making repairs themselves or hiring unlicensed labor. Most states require licensing along with minimum liability and workers compensation insurance policy. Shoddy repairs or worse: the injury of an unlicensed repair person can lead to very costly lawsuits.  So be conscientious and hire only licensed and insured service personnel.

5. Many aspects of property management are often regulated as well. Conducting activities that are only to be conducted by a licensed real estate agent can lead to costly fines. So be licensed.

6. It is essential that you respond promptly to urgent calls and maintenance requests to avoid liability. Maintaining a dedicated 24-hour contact line able to handle after-hours, weekend, and holiday emergencies is the best way to ensure you be available.

7. Some of the most hefty fines are imposed for improperly handling security deposits and other funds in violation of trust accounting and other laws. Violations of these laws can cost up to three times the security deposit if handled incorrectly.  So be diligent.

8. You are best protected when you keep accurate records of all tenant requests including when and how you responded. This is the primary source of reliable information in litigation, so securely keep date and time stamped records of all communication, service, and financial transactions for the full length of time your state statutes require. So be accountable.

9. As a property owner you have access to the personal information about your tenants and you are required to keep that information secure. Failing to keep this private data confidential both in what you share personally and how you store your records can open you up to liability. So be trustworthy.

10. Put simply – rental property owners must get and stay current on all federal, state, local and industry laws, codes and regulations to avoid litigation, liability, and expense.  It is critical that you or your professional property manager remain constantly vigilant and current on all applicable requirements to help you avoid some very costly mistakes. So be, and stay, knowledgeable.

Most property owners don’t have the time or interest to stay on top of it all in order to protect themselves. That’s why your compliance team at Real Property Management helps protect you with impeccable integrity, a proven system, and local regulatory expertise that reduces your risk. Put our experienced team and proven process to work for you.

What Clients Say

The Kattenberg Brothers have raised the bar for rental companies in this community. They provide a higher level of professionalism and have made a meaningful impact on our area.

Gregg Gohl
Gregg GohlBroker, Hegg REALTORS

I signed up with Real Property Management 4 years ago, and couldn’t be more pleased. I had never rented out any property before, and was apprehensive… after all this is our home! An example of their care… last Sunday our renters had a water heater blowout that flooded the lower level. As we do not live near our property, I made one phone call to Real Property and they handled it from there.  Had a plumber change out the water heater, had the carpet experts on the site, and even contacted our insurance people.  All done within 24 hours. If you are thinking of leasing out your property, I don’t know how you could do any better than Real Property Management.

John Hostettler
John HostettlerProperty Owner

I have worked with Josh and Derek for five years. They approach the rental management business with enthusiasm, energy and a desire to provide excellent client service. Josh and Derek know that quality management services will bring financial rewards to their clients which in return will bring success to their own business.

James M. Wiederrich
James M. WiederrichShareholder Woods, Fuller, Shultz & Smith P.C.