Property investing can be a great long-term investment. For the most part, landlording can be an easy and enjoyable process if you use the proper tools, screen applicants to find the best tenants and are educated about the rental market. Every landlord hopes they have a problem-free rental property with the best renters who they won’t have to evict.
However, at the same time, you need to protect yourself, your property and your tenants by being fully educated about different laws both locally and nationally. Knowing your rights as well as your duties as a landlord is extremely important. Keeping up with important changes in the real estate industry, especially the laws and regulations where your rental properties are located, will set you apart and help you stay afloat in the industry. For both new and experienced landlords, here are five laws you must know:
Born during the Civil Rights Movement of the 1960s, this is arguably the most well known and most important law landlords need to be aware of. From the U.S. Department of Housing and Urban Development itself, “Fair Housing Act protects people from discrimination when they are renting or buying a home, getting a mortgage, seeking housing assistance, or engaging in other housing-related activities. Additional protections apply to federally-assisted housing.” Overall, it prohibits discrimination in housing based on race, color, national origin, religion, sex, familial status and disability.
Screening potential tenants is one of the best things you can do as a landlord. This includes running a full background check to verify that they have no criminal background and that they have a good credit score to make sure they are able to pay rent on time. For landlords, the Fair Credit Reporting Act means if you reject a tenant based on the credit report you reviewed, you must send them an adverse action letter notifying them that they have been rejected because of it and also provide the address of the reporting agency.
On housing built before 1978, landlords are required to disclose known information on lead-based paint as well as lead-based hazards. This is to protect families and individuals from lead paint, dust and soil, all of which can be toxic materials. While most homes are more up to date and lead paint isn’t used in housing anymore, if you have an older property, you will most likely be asked questions about lead paint, and you need to be educated. It is important you know the answers as well as follow the law if you do have a property that qualifies for the lead disclosure rule.
Every state has specific landlord-tenant rights, and many are different from one state to the next. Landlord-tenant laws are the basic governing relationship, rights and responsibilities of both landlords and tenants in a residential rental agreement. There are statutes that cover each party separately. It is vital that landlords are familiar with the rental laws where they are located, especially for what they can/cannot include on a lease.
5. Eviction Rules And Procedures
Every state has different evictions rules and procedures, so you will need to make sure you read the specific provisions for your state. However, it is good to know as a baseline that you can’t just automatically evict a tenant; most have specific notices before court proceedings. Some require mediation before court is even an option.
While these are only five laws landlords should be aware of, don’t forget to do your research on others, as well as your local statutes and regulations. Being as prepared as possible when it comes to landlording will help you avoid legal challenges and save money. Ultimately, being educated as a landlord can only benefit you, your rental property and your business as a whole.