Common Legal Mistakes Landlords Make

By E-Renter Tenant Screening
Posted on May 13, 2009 under Fair Housing Act, Landlord and Tenant FAQs, Landlord Tenant Lawsuits | icon: commentBe the First to Comment

landlord-tenant-law on tenant screening blog

If you are a landlord, reducing risk should be an ongoing part of your business. Nobody likes to think about lawsuits and liability insurance, but the facts are that rental property owners are sued every day. You cannot control every liability that comes with rental property ownership, but you can minimize risk with awareness and planning.

Smart landlords know that keeping their properties in good repair and prescreening tenants are two ways to reduce the liability of owning income property. But there are other areas you may not be aware of that could be putting you at risk. Protect yourself and your assets by controlling your actions in these areas.

Hiring workers: Both federal and state government entities actively search for employers who don’t properly document their employees. Landlords who hire workers fitting the description of “employee,” who then pay them in cash and do not withhold proper taxes, unemployment and insurance, are breaking the law. 

Employers who pay “off the books” are subject to back taxes and penalties if they get caught—and the IRS and state agencies are definitely on the lookout for these folks. Your best bet is to hire contractors and repair people who are self-employed, with their own corporations. Keep their business cards and check out their form of ownership. Require proof of insurance, too. 

Discrimination in renting: Federal laws make it illegal to discriminate when renting on the basis of race, color, religion, nationality, familial status, age, gender, and disabled status. Your local and state laws may protect additional groups. Even if you do not intend to discriminate, you must be aware of how the laws affect your advertising and rental procedures. 

For example, you should avoid advertising your property as being close to a church, because you could be sending the message that you prefer churchgoing tenants. You cannot advertise that your property is “perfect for a nice family,” because you could be seen as discriminating against single people. Avoid asking personal questions as a rule. You cannot rent based on tenants’ marital status, whether or not they have children, or how they choose to worship—or not. 

We have covered renting to persons with disabilities in this blog. But while most landlords know that a person in a wheelchair must be accommodated, keep in mind that it is discriminatory to ask about the disability. All disabilities—even those that are not obvious—are protected under the law. Knowing how you must comply and keeping good records are both vital to all landlords.

Improper legal documentation: It may be tempting to use real estate forms that you buy from an office supply store or borrow from a friend, but it’s in your best interests to cover yourself thoroughly before signing any legal documents. Sure, you can download forms from the internet, but have them reviewed by a real estate attorney before you start using them for your tenants. 

Be sure to periodically update your forms, too. Outdated forms could put you at risk if new housing laws have been passed. Plus, you may be asking tenants to sign agreements that are unenforceable. 

Respecting tenants’ rights to privacy:  Landlords must avoid entering properties without proper notice. In most states, it is not okay to stop by unannounced to check on things or make repairs. It’s not worth it if this type of action results in a tenant being released from the rental agreement or is awarded damages.

Reducing your liability and staying out of court will definitely increase your bottom line! So, keep up with changing laws, stay informed, and always ask yourself if there is a better way to do things.

For more landlord resources, including everything you need to know about tenant screening, turn to You’ll know that you have the best possible tenants when you prescreen tenants.

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