The relationship between a landlord and tenant can sometimes go sour. Disputes are bound to arise, and unfortunately, sometimes lawsuits take place. Of course, you can avoid all of this by having a cooperative relationship with your tenant. Still, it’s good to be aware of the most common reasons for lawsuits between landlord and tenant. That’s what this blog is all about.
There are two categories of lawsuits between landlord and tenant: lawsuits against tenants and lawsuits against landlords.
Lawsuits against Tenants
Without a doubt, evictions are the most common reasons for lawsuits between landlord and tenant, although evictions themselves are not common. An eviction is terminating a tenant from the rental property due to a justified reason. Evicting a tenant for an unjustified purpose can land you, the landlord, in some legal hot water. Common reasons for evictions include late or unpaid rent or any other violations of the lease, like bringing in a pet when it is not allowed. Evictions are often set in motion by notifying a tenant with certain notices, like a pay or quit notice. Evictions are very tiresome, and eviction laws are a huge reason why. These laws vary from area to area, so be aware of them before thinking about starting an eviction.
Related: Don’t Let a Fear of Eviction Stop You from Buying Investment Property
2.) Property Damage
Property damage is another possible cause of eviction. Sometimes however, the damage is discovered once the tenant has left the premises. The tenant is already ‘evicted’ from the property. In this case, a landlord can sue the tenant. A tenant can’t be sued for just any property damage, though. A scratch on a table shouldn’t be treated as setting the house on fire, right?
A landlord can sue a tenant for property damage if the damage is very severe and exceeds the security deposit. Luckily for both the landlord and tenant, these situations do not occur often, if at all. Most times, property damage can be excused, covered by the security deposit, or charged extra.
3.) Holdover Tenant
Sometimes once a lease has expired, a tenant may refuse to leave the rental property. If a holdover tenant decides to pay rent, despite the expiration of the lease, a landlord has two choices. If the landlord accepts the rental income, a new lease may be formed. This will depend on state laws. The new lease could be a renewed version of the old lease or a month-to-month lease. If the landlord refuses the rent, the holdover tenant is seen as a trespasser. In this case holdover proceedings will take place. Holdover proceedings are essentially eviction proceedings for this specific situation.
4.) Unpaid Rent
Another common reason for lawsuits between a landlord and tenant arises over unpaid rent. Periodic unpaid rent can normally result in an eviction, but what if the tenant ditches the investment property while not paying rent? In this case, a landlord can go to court to sue the tenant for not paying the rent and leaving before the end of the lease.
Related: How to Deal with Bad Income Property Tenants
Lawsuits against Landlords
1.) Illegal Eviction
Sometimes, evicting a tenant is necessary. But when a landlord doesn’t follow eviction procedures properly, a lawsuit can go against the landlord. The landlord goes from the suer to the sued very quickly.
Illegal evictions commonly occur when the landlord does not inform the tenant with the proper notices. Thus, be sure to notify the tenant with appropriate notices. Also, be respectful to the tenant throughout the entire process. It’s possible for a landlord to be sued for mistreating a tenant during the eviction process.
2.) Illegal Landlord Retaliation
Sometimes a landlord may illegally retaliate at tenants if a dispute develops. A landlord may retaliate at the tenant by unjustifiably raising the rent, starting an eviction for no reason, or disrupting the rental property and its functions, like messing up electricity or water functions of the income property. If any of these actions occur against tenants, they have the legal right to go to court.
3.) Breach of Quiet Enjoyment
A landlord and tenant have rights towards the opposite party. An example of this is landlords’ providing tenants with quiet enjoyment of the rental property. Quiet enjoyment is not interfering with a tenant’s legal use of the property. This may include entering the investment property without permission or notice or disrupting the property’s utilities.
4.) Conversion of Tenant Property
Conversion of a tenant’s property means selling anything in an income property while a tenant resides in it. By doing this, a landlord can quickly get into trouble. Some landlords attempt to justify conversion of tenant property claiming it is because a tenant has unpaid rent. This does not sit well with any court. Avoid converting a tenant’s property at all costs.
5.) Housing Discrimination
Discrimination shouldn’t take place between a landlord and tenant. But when it does happen, more often than not, it’s the former discriminating against the latter.
A landlord may discriminate against a tenant in different ways. A real estate investor can’t discriminate when refusing to rent or sell a property. Advertising a property by excluding a group of people is also discriminatory. Asking discriminatory questions while a tenant applies for the rental property is another example. Be aware of Fair Housing laws to understand what may constitute as discrimination.
Related: How Does Fair Housing Work in Real Estate Investing?
6.) Illegal Credit Reporting
Credit is essential for anything in real estate, whether it’s buying a rental property or renting one. As such, credit is important for both a landlord and tenant. A landlord must report tenants to a credit bureau, and failing to do so can raise a lawsuit. Also, a tenant’s credit information must not be discussed with anyone who has no business with it. In addition, a landlord must inform tenants if they have been rejected and not just leave them in the dark.
Lawsuits between a landlord and tenant aren’t pretty, but sometimes they are unavoidable. Be sure to know your rights and get legal advice when dealing with any lawsuit.
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