How you manage your rental business is largely up to you. However, you do need to comply with the legal responsibilities designated for landlords by federal and state law.
Navigating these laws can be overwhelming, especially for new landlords. Generally, legislation relevant to landlords helps prevent housing discrimination, protect tenants’ privacy, and respect the rights of tenants.
It’s imperative to research the laws that apply to your rental business. Many states offer additional protections to renters in addition to those listed under federal law, so be sure to check with local authorities and consult with a lawyer when necessary.
Complying with housing legislation is vital for the future of your business. A good landlord keeps the relevant laws handy throughout rental advertising, tenant screening, and leasing.
Here are five legal responsibilities for landlords and how to comply with them.
1. Fair Housing
Fair housing laws have perhaps the most significant impact on landlords. Fair housing laws dictate how you can advertise your properties, what questions you may ask on your rental application, how you can conduct showings, how to screen tenants, and more.
Federal Fair Housing Act (FHA)
Under the federal Fair Housing Act of 1968, you may not discriminate against tenants based on any of the seven protected classes: race, color, religion, national origin, sex/gender, familial status, or disability.
In other words, you cannot ask potential tenants to identify their membership in any of these classes in your rental application. In fact, you shouldn’t mention these categories at all—not in your advertisements, applications, or leases.
Federal and state laws also offer some protection to those with criminal convictions. In some states, it’s illegal to deny housing based on certain minor misdemeanors. You can deny an applicant based on particularly severe, relevant, or frequent crimes if those crimes provide suitable evidence that the applicant will pose a danger to other tenants or the community. Check with a local lawyer to ensure you understand which convictions merit denials.
Here are a few reasons you can reject an applicant: poor credit history, unreliable or insufficient income, negative references, frequent late payments, prior eviction(s), and refusal to consent to a background check.
Be aware that your state might provide additional protections to renters. For example, some states include extra protected classes, including marital status and citizenship.
2. State Eviction Rules
States also dictate how and when you can evict tenants. Evictions are expensive and time-consuming, leading many landlords to avoid them at all costs. However, when an eviction is warranted or unavoidable, you should be familiar with the legal procedures.
In some states, such as Ohio, you must provide renters three days to either pay rent or move out before you can file for eviction. If you don’t follow these procedures, your termination may be delayed.
Many states also set rules for the amount and type of eviction notices landlords must provide their tenants who violate terms.
3. Tenants’ Privacy
Respecting your tenants’ privacy is not only a legal obligation. It also instills trust and cultivates healthy tenant-landlord relationships.
Check state laws for your area’s rules surrounding tenant privacy. You likely need to provide 24 hours’ notice before entering a tenant’s unit, whether to address a maintenance problem, perform a routine inspection, or for other reasons.
It’s also good to include this information in your rental agreement so tenants know you are entitled to your right of entry so long as you comply with the law.
4. Livable Housing
As a housing provider, it’s your responsibility to provide habitable housing for your tenants. States write their own definitions and explanations of what counts as “livable” housing.
For instance, in Ohio, a legal doctrine called “implied warranty of habitability” requires landlords to promptly address critical maintenance issues. Some maintenance problems pose a danger to tenants or make them highly uncomfortable. If you don’t make repairs in a reasonable amount of time, your tenants might even have the right to withhold rent.
5. Legally Required Disclosures
Finally, you are also required to make certain disclosures to tenants depending on your state. These disclosures can be written into lease agreements.
Federal law also requires certain disclosures. For example, you must disclose if lead-based paint or other hazards were used in the rental.
Tackle Housing Legislation for Rental Success
Even if you use a property management system tool to streamline advertising and screening, you still need to comply with housing laws. The above examples are only five out of several legal obligations for landlords. As long as you carefully review federal, state, and local laws, complying with housing legislation should be a straightforward step toward your rental success.