How To Legally Protect Yourself as a Landlord


Apr 30, 2018

Legal issues are a major concern for landlords. This is true regardless of whether they own single-family homes, condominiums or apartment complexes. Tenants have the ability to pursue legal action for quite a number of issues and lease agreements are both an official legal document and an important element of a landlord's business. Because of these factors, most landlords are highly concerned about their legal liability and want to take every step possible in order to shield themselves legally.

Landlords have places they can turn for help when navigating the complex legality of renting property to a tenant. Lawyers, insurance agents and property managers can be invaluable allies for landlords looking for advice and guidance about tenant legal issues. Landlords who follow the steps outlined below will be in a good position to protect themselves from legal trouble.

The Six Steps For Landlords To Protect Themselves Legally

  1. Carefully Draft Lease Agreements
  2. Retain An Attorney
  3. Have Proper Insurance
  4. Do Not Discriminate
  5. Keep The Property Safe
  6. Use A Property Manager

The Six Steps Explained

The main line of defense any landlord has against legal problems is their lease agreement. The lease agreement is a legally binding document that outlines what is expected of both the landlord and the tenant during the time the property is rented. Be extremely detailed. For the most part, landlords are permitted to specify a wide variety of terms at their discretion when renting out private property. However, it is important for every landlord to understand what they are responsible for in their relationships with their tenants.

Retaining a lawyer experienced in landlord and tenant law is important. Not only will they assist in drafting a standard lease agreement as well as ensure a lease agreement provides suitable legal protection, but they can also represent the landlord if a legal dispute arises. Remember, tenant law varies widely between states, with some having stricter regulations than others. This is why it is important for landlords to retain an attorney familiar with the law in their state.

Next, landlords need to secure adequate insurance for their property. Umbrella liability insurance will protect the landlord's assets in the face of a disaster and if maintenance workers are employed, workers compensation insurance will be required as well. It is usually up to the landlord to decide whether renters insurance should be required on the part of the tenant. If they do decide to require renters insurance, they need to make sure the tenant provides proper proof of it. Landlords should consult with an insurance agent to determine the right policies for their properties.

A major exception to the freedom landlords have to impose restrictions is when it comes to discrimination. Landlords are not allowed to discriminate in any way against prospective or current tenants for reasons such as race or gender. Discrimination will also tarnish the landlord's reputation, making it more difficult for them to rent properties and which results in lost income. Discrimination is simply unfair and wrong, as well as illegal, so don't do it.

Landlords are required by law to keep their properties reasonably safe for their tenants. Keeping the property safe includes regular inspections, especially when a previous tenant moves out and a new tenant moves in. It also means responding promptly to maintenance requests and being vigilant regarding any potential safety issues. For example, steps to the property might be crumbling, which presents a legal liability if someone trips and falls. Landlords may decide to go the extra mile by adding more safety features to a property, such as security cameras and gates. This may be especially beneficial if it is a luxury property or located in an undesirable area.

Landlords who are not comfortable managing their properties themselves should consider hiring a property manager. This is especially a good idea if the landlord owns multiple properties in different locations. Property managers are usually more knowledgeable about maintaining a property and can help any landlord guard against legal issues that might occur. They know what they can and cannot ask in tenant interviews, they perform inspections and they hire from a stable of reliable contractors so maintenance issues are fixed in a timely manner.

Landlords who follow these tips will be less likely to run into legal problems. The appropriate steps will result in better relationships with tenants and less legal liability for the landlord. Proper protection should be in place before the first tenant ever moves in.