Property management is not as easy as it seems from afar. There are many property and rental laws that an investor should take into account before starting a business. These laws vary from state to state. If you are not familiar with your local legal system, your business may fail and you might have to face some big problems with tenants.
Hiring a property manager to help you get familiar with the rental laws is highly recommended. There are federal, local, and state laws that you need to know when you are a rental property owner.
Firstly, let us ensure that you are familiar with the federal rental laws.
The Fair Housing Act
The Fair Housing Act is a law that prohibits property owners from discriminating against groups of people. You can not legally decline a tenant due to their status. These protected classes include race, religion, color, national origin, sex, familial status, or disability.
This act doesn’t only prohibit you from choosing a tenant based on their status, but it also affects your marketing strategy. You can not target a single demographic with your ads that could be viewed as discriminatory against one of the protected groups. For example, you can’t advertise by saying your property is perfect for single people because it’s very small, it would be discriminating against familial status. Therefore, even if you don’t want kids living in your rental, you don’t have a right to decline families.
Moreover, you can not choose a tenant based on their criminal history, either. The Fair Housing Act might only have 7 protected classes specifically mentioned, however, it protects many more. State laws take it further and add other classes to their list of protected renters. You can’t choose a tenant based on their source of income, sexual orientation, or gender identity.
Fair Credit Reporting Act
The Fair Credit Reporting Act prohibits landlords from reviewing applicants’ credit history without permission. This is a rental law you must follow. Landlords often wish to review applicants’ credit history before choosing them as tenants to ensure that they are responsible. However, a property owner can only review the applicant’s credit history if they are allowed to by the applicant. Moreover, if a property owner denies an applicant due to their credit history, they must let the applicant know the details of how they received the credit report.
State-Level Tenant-Landlord Laws
State tenant-landlord legal systems are much more elaborate than federal tenant-landlord laws. Each state has its own different values represented in its legal system. State laws are much more focused on tenant rights and practical matters. As a landlord, it’s crucial that you thoroughly understand the rental laws to protect your rental property.
Although laws vary from state to state, some of the legal matters are very common and you should look into the details. Let us go over some of the most common state tenant-landlord rental laws.
- Discrimination and Fair Housing
- Standards of Habitability and Repairs
- Lease Documents
- Abandoned Property
- Eviction Regulations
Discrimination and Fair Housing
As previously mentioned, The Fair Housing Act protects tenants from discrimination. However, federal law is much more limited than state laws. As many states elaborate on specific classes. Local rental laws make sure that there are additions to the seven protected classes of tenants.
Standards of Habitability and Repairs
You can’t rent out a property without making sure it meets the standards of habitability first. These standards are necessary to ensure that your tenants are safe and they live in basic comfort. These standards involve building codes and maintenance standards.
To meet these standards, you must ensure that the property has working fixtures, plumbing, and heating. You must have installed fire alarms and carbon monoxide detectors. You are also responsible for pest control.
Maintenance issues also fall under the property owner’s responsibilities. As a property owner, you must fix any maintenance problems, such as faulty appliances. Tenants must report maintenance issues in a certain amount of time and a landlord must solve these issues quickly.
A legal lease document is required to be sure that each concern can be addressed in time. Anything that the state rental law doesn’t regulate, but you need to have an agreement on with your tenant, should be included in lease documents.
You can specifically point out the duties and roles of each party in the documents. Moreover, it’s best to add a list of consequences if either party doesn’t meet the requirements of the lease.
Sometimes tenants leave behind their possessions, such as furniture, damaged furniture, unwanted appliances that they brought with them, personal belongings, etc. Depending on the state law, the landlord might be legally obliged to try to contact the tenant and let them know about the abandoned property and return it. Some rental laws oblige the landlord to remove and store property, while others allow landlords to simply dispose of the belongings. Be sure to check out your local law.
Eviction is a difficult and unwanted process for both parties. However, it’s sometimes very necessary. Therefore, you must become familiar with your state laws that specify the terms of eviction. Eviction requires a court hearing in most cases, you must not threaten your tenant, cut off their utilities, or use physical force against them to evict them. You must provide your tenant with the time notice and address the court to take back possession of your property. There are legal reasons that justify eviction.