Disclaimer: This article is not meant to serve as legal advice. We are not attorneys, lawyers, or licensed professionals. Always consult with an attorney or lawyer when seeking legal advice.
Love losing money? How about not sleeping through the night? Want to constantly live in fear that you could be sued or end up behind bars? If just the thought of this scares you, then you’re probably a decent landlord. But, no matter how good your intentions are, the law won’t turn a blind eye if you institute illegal property management practices. Doing ANY of the below practices could put you in hot water, so avoid them at ALL costs!
1. Not Conducting Required Inspections
A property inspection is a formal evaluation of your rental unit by a certified inspector. Conducting these inspections is vital because they help identify potential problems with your property and provide information on how to fix them, saving you money down the road and keeping your tenants safe.
Your city may also require a “certificate of occupancy” before renting your property. This certificate is given after an inspection is passed, ensuring that the home is in safe standing for a tenant to reside comfortably. Skirting this inspection could come with fines from the city, and they may shut down your rental business completely!
2. Excluding to Disclose Property Hazards
Every landlord knows that certain types of property are more likely to be hazardous. For example, older buildings or ones that have been neglected can have issues with mold and mildew growth. They also may not meet modern safety standards for electrical wiring or plumbing systems. If you’re a landlord and your rental property has one of these characteristics, you should disclose it before tenants move in so they know what they’re getting into (and can decide whether they want to accept those risks).
If you fail to disclose any issues like this at the outset, you could end up being sued by tenants who discover hidden hazards after moving in and suffer injuries because of them. Even if no one gets hurt directly as a result, this could still lead indirectly. For example, if someone gets sick from living in an unhealthy environment where mold has spread throughout multiple rooms due to poor ventilation (or perhaps even due simply because someone else smoked inside), then everyone else who visits regularly may get sick too!
Some common hazards:
- Lead-based paint
- Carbon monoxide leakage
- Natural gas leakage
- Unstable flooring
- Dangerous wiring
- Disturbed asbestos
3. Increasing Rent Without Proper Notice
As a landlord, you have the right to increase rent and make other changes to your tenants’ new leases. However, there are some rules around this process.
The proper notice period for any rent increase is 30 days before termination of a lease period. So, for example, if your current lease ends on May 31st and you want to raise rents by $100 per month starting on June 1st, then you must give written notice by April 30th at the latest—and preferably earlier so everything is clear in advance.
For year-long leases in many states, a landlord must give 60 days’ notice in writing. So, if your lease is up on May 31st, you’ll need to reach out to your tenants at the end of March/start of April. This helps you follow legal rent raise timelines and allows your tenants more breathing room when deciding to stay or move.
4. Increasing Rent Beyond Legal Limits
First things first, you CANNOT change rent in the middle of a lease. So, if you’ve signed a year-long lease with a tenant, your best bet is to wait until the lease is over to raise rents or find a new tenant.
In some rent-controlled areas, you cannot raise rent more than a certain percentage. So, for example, if your city has tight rent control and only allows a 10% rent increase per year, increasing rent by 20% could get you in trouble with your local jurisdiction.
Thankfully, most states do not have legal limits on rent increases, BUT you will always need to follow the rent raise notice requirements!
5. Entering the Rental Property Without Prior Notice
You can’t just barge in on your tenants any time you want. Landlords must give appropriate notice before entering the rental property. This means that if you show the rental unit, inspect it for maintenance purposes, or even just pop by to say hello, you need to give at least 12 hours’ notice in some states (48 hours is recommended).
6. Refusing or Stalling to Do Necessary Repairs
Some repairs or upgrades, like painting the cabinets, don’t need to be done ASAP. But, any repairs or maintenance that could affect your tenant’s comfort, safety, or standard of living MUST be performed as soon as possible.
Suppose you stall on replacing or repairing a furnace in Chicago during winter or an air conditioner in Miami during the summer. In that case, your tenants could sue you for not providing adequate and safe housing.
As always, treat your tenants with respect, and keep your property up to standard!
7. Evicting Tenants to Sell a Property
If their lease is still in place, evicting tenants to sell a rental property is illegal. You may be fined if you do it, and the tenant will likely sue you. Your options for selling a property with tenants in place are:
- Wait until the lease period is up, tell tenants the lease will NOT be renewed, and put the property up for sale
- Sell the property with tenants in place to another investor
- Reach an amicable agreement where your tenants optionally exit the property, either in exchange for money or to live at another rental property you own
Lease agreements MUST be followed unless the two parties amicably agree to part ways.
Illegal Property Management Practices WILL Cost You
As you can see, there are many illegal property management practices that can hurt you, your wallet, your reputation, and your business. These tactics WILL cost you in the long run, so don’t even think about trying them! If you believe your landlord is engaging in any of these practices, don’t hesitate to contact them or a trusted legal professional about your concerns!
If you’re a landlord, be one of the good ones, and take care of your property and tenants!
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