What are some of the most common problems for landlords?
Federal, State, and Local Laws
Many landlord problems stem from a lack of knowledge regarding management of rental units and a failure to keep current with applicable federal, state, and local laws. A landlord must know the laws that govern his business. The legal relationship between landlord and tenant is spelled out in state statutes, local ordinances, safety and housing codes, common law, contract law and case law.
Tenant Screening
Filling vacancies with good tenants is the most important single factor in minimizing landlord problems. A majority of landlord-tenant problems and financial losses can be traced to inadequate tenant screening procedures. Many landlords, anxious to fill vacancies, create problems for themselves by rushing through the screening process, putting themselves at risk for a troublesome, perhaps costly tenancy.
Lease Agreement
Many landlords do not utilize adequate lease agreements. Using a generic lease or a lease that contains outdated information can cause problems for the landlord. A landlord should customize his lease agreements to the rental property in order to protect his business.
The landlord’s lease agreement is a binding contract between landlord and tenant. It should explicitly address the responsibilities and rights of landlord and tenant, detailing obligations and duties of each party. A good detailed written lease agreement reduces the chance of misunderstandings regarding duties and responsibilities of both the landlord and the tenant.
Lease agreements must include tools for enforcing the lease terms and conditions. A lease agreement cannot contain any clauses that violate landlord-tenant laws, fair housing laws, tenants’ rights, and any other applicable federal, state, or local laws. A good lease agreement should include a severability and survival clause in the event a lease clause is deemed illegal or ruled unenforceable.
Policies and Practices
Rent Rules
While the lease agreement should clearly define rent policy, it is important that the rent policy be fairly and consistently enforced in a non-discriminatory manner with all tenants through the use of rent rules. Clearly defined rules help the tenant understand what is required and what will happen if the tenant defaults. By enforcing the rent rules, the landlord can reinforce the consequences of the tenant failing to meet his obligations.
Deposits & Fees
Many landlord-tenant disputes concern rental fees and deposits, particularly tenant security deposits. Most state landlord-tenant statutes specifically address security deposit disclosure requirements, collection of security deposit funds, holding of funds in a specified account, including applicable interest, and the accounting and return of security deposit funds at lease termination.
Some states regulate by statute the landlord’s policy for rental late fees and grace periods. Landlords should make sure their deposits and fees policies are in accordance with applicable statutes for all rents issues.
Property Maintenance
Adequate and timely property maintenance protects the landlord’s investment, avoids more costly emergency repairs and additional damage, and reduces tenant and governmental actions related to habitability issues. Investing in property upgrades can allow higher rents, attract better tenants, and increase property value.
Move-In/Out Procedures
Many landlords fail to follow adequate procedures for moving tenants in and out. Some landlords fail to comply with laws related to possession of the rental unit and disposal of abandoned property.
Enforcement of Lease Terms and Conditions
A landlord can create problems or worsen problems if he delays taking action against tenants who materially default on their leases, and/or cause problems for other tenants. If it is in the best interest of the landlord’s business, a landlord should not hesitate to evict. Failure to evict when necessary can result in losses that far exceed the total cost of an eviction.
A common problem is waiting too long before taking proper action against tenant defaults. By waiting the landlord hopes the tenant will cure his default and the landlord won’t be forced to take a negative action. Ignoring problems or failing to act in a timely and appropriate manner to enforce rental policies does not cure tenant defaults.
Some types of tenant defaults demand swift action, e.g., threat of harm to others or damage to the property. The landlord’s failure to confront a threatening situation or potentially dangerous situation that affects the safety and security of tenants and property is a serious matter. The landlord has the obligation to take reasonable measures to secure tenant safety, security, and privacy.