Always check applicants’ credit history, references, and background, even if you “have a good feeling” about them. Haphazard screening often results in problem tenants who don’t pay rent, trash your place, move in undesirable friends, or worse. Another bad result? Lower property value.
The best way to avoid tenant lawsuits and complaints is to document everything: the rental application and lease, when and how you handle repair requests, and the notice you give to enter a tenant’s apartment or end the tenancy.
Tenants will go to the mat over their security deposit. To avoid disputes, follow state law when setting, collecting, holding, and returning deposits. Inspect and photograph the property at move-in and move-out times, and document all deductions for repair and damage.
A leaky toilet can cost you its weight in gold. Failure to maintain your property and handle complaints quickly can lead to tenants withholding rent, suing you for injuries, or moving out without notice.
You can be liable for thousands of dollars in tenant losses if your rental property is an easy mark. Landlords are sued more than any other business owners, with the average settlement paid by a landlord’s insurance company (in safety cases) equaling over half a million dollars.
Your tenants’ home is their castle. Give at least 24 hours’ notice (or the minimum required by your state law) before entering a rental unit, and make sure it’s for a good reason, such as making repairs. FYI, snooping to determine whether your tenant is a “boxer or brief man” is not a good reason.
What you can’t see can hurt you. Landlords are liable for tenant health problems from exposure to a rental property’s environmental hazards, which may include mold. Most states also require you to disclose lead-based paint hazards.
Say hello to your alter ego. If you hire a property manager who illegally discriminates against tenants, fails to comply with landlord-tenant laws, or is simply incompetent, you’re the one who could be held financially responsible. Supervise your manager carefully.
Don’t even think about skimping on insurance. Good liability and property insurance are absolute must-haves to protect your property from fire, storms, burglary, vandalism, personal injury, and lawsuits.
Call your tenant before you call your lawyer, even if you dread it. Unless you need to immediately evict a tenant, for example, over unpaid rent or drug dealing, try to resolve the problem informally, through mediation by a neutral third party, or in small claims court. Nothing raises emotional stakes and costs like the letters a-t-t-o-r-n-e-y.
This article was excerpted from Nolo's Little Legal Companion. You can get a free copy by signing up for one of Nolo's Legal Newsletters.