Landlord-tenant law is a US common law. It was made to govern and mediate the relationship between a landlord and a tenant. Whether it is your first time renting out, or whether you have been the ‘ring’ for a while, you must know that being a landlord is not an easy job. Even more challenging is dealing with the legalities of real estate investment especially if you do not have a law background. To help you out, we have laid out a list of landlord laws and concerns you should pay attention to when renting out your property.
State Laws
As each state in the US is its own separate sovereign, you should look up your state’s landlord-tenant law according to that state’s jurisdiction. Forms of lease, eviction procedures, tenant privacy rights, required landlord disclosures, rent rules, handling abandoned property are all examples of things that are governed by different laws in different states. Because of that, you need to make sure you study your state’s landlord laws to avoid any legal downturns.
Lease/Rental Agreement
First and foremost, make sure the lease abides with state jurisdiction you are under.
Secondly, know that after you and the tenant have both signed the lease, it becomes a legally binding contract. Clearly outline the duties and obligations of the tenant as well as the landlord. Agree on the rent, the deposit fee, the term of the tenancy, the rules and restrictions of the household – is the tenant allowed to keep a pet?
Identifying all of the above is very important. For instance, if it was the landlord’s responsibility to run repairs in the property and they fail to, the tenant may use the ‘repair and deduct’ tactic in which they run the repairs themselves and then deduct the cost from their monthly rent. ‘Repair and deduct’ is used in states like New York and California.
This is why you need to make sure your lease not only abides by the state law, but is also clear of any ambiguity. The last thing you need is a lawsuit filed against you for something you have overlooked in the lease like failing to run major repairs.
The Fair Housing Act (FHA)
The Fair Housing Act outlaws the refusal of renting out a property because of discrimination. FHA prohibits landlords from asking any discriminatory questions regarding race, religion, gender, disability, sexual orientation, origin, etc.
You may run standard background, rental history and credit checks, and you may ask questions like “Why are you moving?” or “How many people will be living in the apartment?” or “Can I ask for a reference from a previous landlord?”
You may not ask “Where are you originally from?” or “What religion do you follow?”
Make Disclosures
When renting out your property, there is some information you should disclose. Not all states will require you to share the same type of information with the tenant, but there are a few landlord laws that almost all states have in common.
For example, Under Megan’s Law, you are obliged to inform the tenant of the existence of registered sexual offenders in the neighborhood. Other things you need to give the tenant ‘heads up’ about are things like mold and other safety hazards. You may also need to tell the tenant about any recent deaths that have occurred in the apartment.
Tenant Privacy Laws
About 50% of states have laws governing tenant privacy. Those govern when and how you can and cannot enter a property. You will usually have to give at an at least 24 hour notice before you show up at the property.
Some states do not have laws protecting tenants’ privacy, but there is usually an implied “covenant of quiet enjoyment” when the two parties sign the lease. So even if the state you are in does not have laws governing tenants’ privacy, you should still respect your tenant and inform them if you ever intent to drop by. The only time you may come without notice is in the case of an emergency.
You are allowed to enter the property when you have the tenant’s permission, when you have agreed to run repairs, when you wish to show the property to possible tenants or buyers, and when you have reason to believe the tenant has skipped on the property.
It is also crucial to comply with The Fair Credit Reporting Act (FCRA) designed to protect consumer, in this case – the tenant’s, privacy. Failure to comply with the FCRA could make you subject to unnecessary lawsuit.
Eviction Laws
A landlord may consider eviction if the tenant fails to complete rent payments, fails to leave the property once the lease expires, causes serious damage to the property, or violates the lease. Every state has its set of laws governing eviction procedure. We suggest that you become more than familiar with those. In most cases, you will have to give the tenant a notice. If they refuse to leave the property, you may file for a lawsuit and have them leave with a court order.
Other Legal Concerns – Airbnb
States also have specific laws and zoning codes governing Airbnb rentals, and it is important to understand how these laws work. Airbnb especially attracts legal concerns in different states and cities around the nation. For example, in New York, it is illegal to rent out your whole class A multiple dwelling property for a period less than 30 days without being present at the property. San Francisco short term rental law on the other hand allows you to rent out your property without being present for up 90 days.
Additional things you might need to look into includes tax laws such as the Transient Occupancy Tax (paid by the guest) in some cities, such as San Francisco. You can use an Airbnb calculator to determine how taxes and other expenses can affect your bottom line.
The list of laws and regulations goes on and on. You may find your city in Airbnb’s general city regulations here.
The above are just a few of many landlord laws and legal concerns you need to acquaint yourself with. We cannot stress the importance of abiding by the law in the real estate world. So if you feel like you might be in way over your head with legal matters, consult a lawyer, a fellow real estate investor, and do your research.