In the U.S., there are nearly 48.5 million rental units. A little over half of these rental units are owned by business entities, while the rest are owned by individual investors.
There are a lot of good reasons to own rental property, including providing a passive income source as well as the potential for property value appreciation. Many Americans have managed to make rental property ownership their full-time job, while others might keep a few rental properties as a way of making extra income.
If you are considering becoming a landlord, you likely have a lot of questions. What regulations do landlords need to know? Do I need to be registered as a landlord? What should I know as a landlord in general?
Understanding landlord-tenant laws is essential for protecting yourself legally and financially. Here’s a brief guide for self-managing landlords regarding some of the most important federal and state laws.
The Fair Housing Act
The Fair Housing Act is one of the two major federal laws that impact all property managers and landlords across the country. This is a law that prohibits discrimination due to national origin, race, religion, color, disability, sex or familial status. This law applies to:
- Renting or buying a home
- Seeking housing assistance
- Getting a mortgage
- Engaging in other housing-related activities
This law extends beyond leasing where landlords are concerned. It also applies to advertising, meaning that it is illegal to market your properties to any specific group of people.
Fair Credit Reporting Act
The Fair Credit Reporting Act is a law that requires landlords to do a number of things when running a credit check. These include receiving permission from an applicant to run a credit report, informing the applicant if their credit report was the basis for adverse action or denial, and providing specific information regarding the credit reporting agency they used.
Lead Paint Law
It is required by landlords under federal law to disclose the presence of lead paint. They are not required to remove lead paint under federal law, but state laws might dictate otherwise. It’s important to learn about your state and municipality laws regarding lead paint in addition to the federal law.
Laws About Discrimination
Beyond the Federal Fair Housing Act, state and local laws might provide additional protection beyond the federal law. These might extend protections to people based on their sexual orientation, age, marital status, political association and even hairstyle.
A Legal Lease Document
Each state and some municipalities might have laws regarding the lease contract. Rental contracts must abide by all laws and be legally written. It is necessary to indicate tenant names, monthly rental rates, and leasing periods clearly.
In some jurisdictions, it is required that certain legal disclosures be included in the lease document. Working with a lawyer to produce your rental contract can help ensure that the lease provides all of the required information and doesn’t break any federal, state, or local laws.
Laws About Required Disclosures
It is common in many states to require landlords to inform tenants about individual landlord policies, certain state laws, or specific information about the rental. It might be required that this is disclosed within the lease itself or in additional documentation.
It’s important to look into your state’s requirements about disclosures. However, some commonly required disclosures include notice of recent deaths, mold, meth contamination, or other safety or health hazards.
Laws About Providing a Safe Environment
One important landlord-tenant law has to do with the habitability of the rental unit. The definition of “safe, habitable condition” might be different between states. For this reason, you must familiarize yourself with the laws for landlords in your location.
Typically, this means that the property cannot have serious deficiencies. It also means that fixtures, appliances, heating, and plumbing need to be in working order. You also cannot rent out a property that is infested with pests or insects.
Landlords are usually responsible for dealing with infestations even if the outbreak happens after the tenant moves in. However, in many states, this can be avoided by specifying that the renter is responsible for pest control.
Laws About Making Repairs
In the lease agreement, it will be outlined that the tenants are responsible for reporting necessary repairs. It then becomes the landlord’s responsibility to complete the repairs within an appropriate amount of time.
If a landlord doesn’t make a repair in a timely manner in a way that impacts the safety or health of a tenant, a tenant might have the right to withhold rent.
Laws About Security Deposits
It is common for landlords to require a security deposit from the tenant. This is in order to cover the costs of any damage the tenant causes or if they fail to pay rent. A landlord must refund the security deposit unless it is needed to cover the cost of fixing property damage or covering default rent payments.
In some states, how the security deposit is kept is dictated by the law. It is also typically required that an itemized list of deductions must be provided to the tenant if the landlord is using some of the deposit for these purposes.
The unused portion of the deposit must be returned and the itemized statement must be provided. If they aren’t, the landlord can face financial and legal repercussions.
Laws About a Renters Right to Privacy
Most landlord-tenant rules and regulations cover the right to quiet enjoyment of a tenant. This means that it is their right to live on a property undisturbed. The landlord must give proper notice before entering the rental unit, which is usually 24 to 48 hours unless there is an emergency.
Landlords can only enter the rental property for valid reasons and at a reasonable time of day after giving notice.
Landlord-Tenant Laws: Essential For Protecting Yourself Legally and Financially
Without a good understanding of landlord-tenant laws, you can find yourself in a mess of legal and financial trouble. It’s therefore very important to familiarize yourself with the federal, state, and local laws regarding the rights of tenants and the responsibilities of landlords.
Are you looking for more valuable resources to serve as a guide for self-managing landlords? You can find more resources specific to your state here.
Please understand that because of the nature of the topic, this page has been written in a generalized form. Further guidance should be sought on the topic being searched by the landlord.