Investing in property is a great source of income and it is a fairly enjoyable and simple process. The only thing you will be responsible for are to efficiently screen your applicants, use the proper tools, to find quality tenants, and to research your competitors.
Every property owner hopes to run their rental property business smoothly and keep it problem-free. While finding quality tenants solves most of your problems, you need to also protect your rights, your property and your renters by educating yourself about national and local laws.
Knowing your duties and rights as well as constantly learning about the shifts in the real estate industry are crucial to staying afloat. To help you out, we have listed 5 laws that are going to aid both experienced and new landlords,
1. Fair Housing Act
Established in the 1960’s, in the era of the Civil Rights Movement, this is one of the most widely known and crucial laws for landlords. The US Department of Housing and Urban Development published this act to protect people from discrimination when buying or renting a home, seeking assistance in housing, applying for a mortgage, or taking part in other housing activities.
To sum it all up, the Fair Housing Act puts an end to discriminatory practices in the housing industry and gives equal rights to everyone regardless of their sex, color, race, religion, disability or familial status.
2. Fair Credit Reporting Act
Screening your potential tenants is among the best things you will do as a landlord. This can include running holistic background checks on your tenants to verify whether they have a criminal background or a poor credit score. You want to see if they will be able to pay their monthly rent on time.
The Fair Credit Reporting Act allows landlords to reject tenants based on the background checks they reviewed. The only thing you will be responsible for as a landlord is write a letter to them to notify them of getting rejected and provide them with the address of the credit reporting agency.
3. Eviction Procedures and Rules
Each state has unique rules and procedures for evictions and you need to be educated about the specific regulations in your state. A baseline of all of these laws is that you cannot directly evict your tenants and most cases require specific notices to be sent before landlords can depend on court proceedings. In some states, mediation is required before courts can even be considered as an option.
4. Lead Disclosure
For properties built before 1978, property owners are required by law to disclose all known information about lead-based hazards and lead-based paint. This law was established to protect individuals and families from the toxic effects of lead paint, soil and dust.
While most modern properties have transformed to not use lead paint, you will likely be questioned about lead hazards if you own an older property.
5. Landlord-Tenant Laws
Each state has very specific landlord-tenant laws and, in most cases, these vary from state to state. These laws govern the rights, relationships, and responsibilities or tenants and landlords that are in a rental agreement. There are many statutes that discuss both parties individually and it is crucial for landlords to be familiar with these laws, especially for whatever is not included on their lease.
While we’ve only touched-up on 5 laws that every landlord should know of, it is your responsibility to research more and look-up local regulations and statutes. Being prepared helps avoid legal problems beforehand and saves a lot of time and money. Ultimately, learning about these laws will benefit your rental business as a whole.