Lawsuits and legal pitfalls can burden rental property owners and managers, often yielding costly settlements and operational setbacks. However, with the right knowledge and proactive steps, these hazards can be avoided. Avoiding legal pitfalls starts with understanding the legal challenges rental property owners and managers face and applying industry best practices. This enables you to protect you and your properties while keeping management smooth. In this guide, we’ll review the most frequent lawsuits and legal pitfalls rental property owners face and suggest actionable steps you can take to avoid them.
Common Legal Pitfalls in Property Management
In the rental real estate industry, certain legal pitfalls repeatedly push 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 must treat residents fairly and equally and stay complying with fair housing laws. State and federal housing laws define landlord responsibilities, such as:
- Providing a habitable living environment for tenants
- Quickly addressing maintenance and repair requests
- Following local and federal housing and anti-discrimination laws
- Managing security deposits appropriately
- Observing legal eviction processes when necessary
Landlords can violate a tenant’s rights in countless ways if not diligent—denying a disabled person a lease or mishandling personal belongings during an eviction can lead to costly lawsuits. The right to privacy also mandates that landlords provide proper notice before entering, with failure risking serious legal consequences.
Negligent Maintenance and Repairs
Neglecting to provide proper maintenance and repairs is another common legal pitfall connected to tenant rights. The law requires landlords to keep a rental property safe and habitable, and overlooking this can result in personal injury, illness, or damage to personal property, potentially involving a property owner in 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—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 rental property owners and managers can do much to prevent legal issues from arising. Consider these steps:
- Clear and Comprehensive Lease Documents: Ensure lease documents are clear, detailed, legally sound, and specify key terms. Review them with tenants for mutual understanding, then follow the terms closely and expect the same from tenants.
- Training on and Adherence to Fair Housing Laws: Stay updated on local and federal housing regulations to ensure compliance. Know your obligations under the law and pursue training to address housing law disputes effectively.
- Effective Communication and Documentation: Encourage consistent, positive communication to enhance tenant satisfaction. Recognize tenant efforts, request their feedback, and respond to maintenance and repair requests swiftly, providing updates on work done on the property. Document all communications and agreements with tenants, including calls, professionally.
- Proactive Maintenance: Establish and maintain a proactive maintenance plan. A strict maintenance schedule keeps the property and tenants safe.
- Fair Tenant Screening and Eviction Procedures: Implement fair practices for tenant screening, applications, and leasing. Conduct thorough screenings and background checks and verify references. In 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 duties, act proactively, and implement sound management strategies to avoid common legal pitfalls and lawsuits. Seeking legal advice when unsure or facing a tenant taking legal action is a wise choice. This protects you, your tenants, and your property.
Need help ensuring your property management is legally sound? Contact your local property management experts in Norfolk; Real Property Management Infinity’s team is ready to assist. Get in touch with us online or call 757-395-4274 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.
