3 Things to Know About Landlord Liability

Owning a rental property exposes landlords to several liabilities, some of which can bring their business grinding to a halt if they’re unprepared. While landlord-tenant laws vary from state to state, here are three important matters which can reduce potential problems in your rentals (but remember to always seek the counsel of a lawyer before pursuing any legal action).

The lease agreement

If you started a corporation to limit your personal liability, make sure your state corporation filing is active before signing a lease agreement. In some states, if you sign the lease agreement as an official signatory of a corporation, but that corporation is expired or otherwise no longer in “good standing”, it may nullify the execution of your lease agreement. This leads to an inability to enforce any provisions of the lease, which complicates matters like evictions or debt collections.

If a tenancy issue comes up that is not covered under the lease agreement, don’t assume you have no liability for that issue. Check your state’s landlord-tenant laws, as some issues might possibly supersede the lease by writ. Additionally, just because a particular item might not be covered under your landlord insurance policy, that may not necessarily mean you’re not liable to pay for it. If disaster strikes at your rental property, it’s always a good idea to consult a lawyer well-versed in real estate and tenancy laws to cover all the bases on your liability and potential costs.

Discrimination or harassment is costly

The most important umbrella law governing all housing activity is the federal Fair Housing Act, which protects renters from discrimination based on race, color, religion, nationality, gender, familial status, and disability, as well as age under other laws. This means that whether you are speaking to someone on the phone, showing a property to a prospective tenant, or even advertising a rental, attempting to prevent a tenant from renting your property based on any of these categories will land you in hot water.

While you may be concerned about renting to tenants with young children or to college-aged students because of damage or disruptions, you cannot discriminate based on these types of reasons. Make sure your tenant screening process focuses on legal means of determining who may or may not rent your property. In many cases, you can even perform a tenant background check free of charge.

An ounce of prevention is worth a pound of cure

Managing and maintaining rental property can be an expensive venture. Neglecting to make necessary repairs or improvements to a property only increases the likelihood that you’ll have to pay money in the future, either for a critical failure of a structural or internal component, or for a liability claim. Many times, preventative measures are far cheaper to afford than the cost of repair, and some of them are fairly straightforward. If you aren’t prepared, then you may have to contact a personal injury law firm if someone is injured on the property.

Here are a few examples of preventative measures:

• Make sure safety hazards due to weather conditions are promptly or proactively addressed (salt on walkways, timely snow removal, flood-related erosion of walkways or driveways, downed trees, etc.)

• Make sure safety features such as lights, gates, locks, doors, windows, alarms, and security features are in full working order.

• Enforce policies that keep residents reasonably safe from harm, including but not limited to illegal activity on the premises or the presence of dangerous animals.

Staying abreast of the latest laws and legal precedents can be overwhelming, but taking the time to investigate and protect your business from potential liability claims can save you money and hassle in the long run.