Key Takeaways
- Missteps like discrimination, mishandling security deposits, unlawful evictions, and entering a unit without notice are all serious legal violations.
- Other key issues include retaliating against tenants, neglecting repairs or inspections, and failing to disclose known hazards like lead-based paint.
- Understanding and avoiding these illegal actions is essential for protecting your business, staying compliant with landlord-tenant laws, and building trust with tenants.
Avoid Making These Illegal Mistakes
If you’re a landlord or property manager, it’s likely that one of your worst nightmares is finding yourself sued by a tenant—it’s time-consuming, costly, and can cause harm to your rental business. Sometimes, the situation may be a simple misunderstanding, but when an issue can’t be resolved and legal action is taken, you could potentially land yourself in trouble if you don’t know which landlord practices are legal. Even if the conduct is accidental or done without knowledge of landlord tenant laws, tenants still have the right to sue for unfair landlord practices. The best way to stop this from happening is to get educated about some of the most common illegal property management practices so you can watch out for them in your business and avoid them. Read below for our list of illegal landlord and property manager practices so you can avoid legal disputes and build a fair, welcoming environment for all your tenants.Illegal Practices Landlords Should Avoid
The list of laws about landlord practices is understandably a long one. There are many things a landlord or real estate owner cannot do when renting a space to a tenant, and these practices should be avoided at all costs to eliminate the possibility of legal issues down the line. Let’s look at some of the most common illegal practices you should watch out for when renting to tenants.1. Discriminating Against Tenants
One common issue landlords find themselves in occurs during the tenant screening process: Discriminating against prospective tenants. Whether intentional or not, some landlords reject tenant applications for discriminatory reasons that violate the Fair Housing Act of 1968. Illegal landlord actions like this can land you in serious trouble if a wronged tenant takes legal action. According to the Federal Fair Housing Act, which prohibits discrimination when purchasing or renting a home, landlords cannot reject a tenant or otherwise base housing decisions on their membership in any of the following protected classes:- Race. This includes characteristics such as skin complexion, hair texture, or facial features.
- Color. This includes skin complexion, shade, tone, pigmentation, etc.
- Religion. This protects those who both those who follow traditional and organized religions as well as those who do not follow a religion at all.
- National origin. This includes people from other countries and areas of the world or people with different accents or ethnic backgrounds.
- Sex. This protects sex and gender discrimination, regardless of sexual or gender orientation.
- Disability. This means as a landlord, you’re prohibited from asking about a tenant’s mental or physical disability status, as well as asking for any medical records. You’re also required to provide reasonable accommodations for disabled tenants, even if at your own expense.
- Familial status. This refers to renters who are pregnant, in the process of adopting children, or who have children under 18 living with them.
2. Withholding or Misusing Security Deposit
Security deposits have a specific use: Covering the cost of damages to your unit or unpaid rent/fees when a tenant moves out. Damages can be both physical (broken furniture or wall damage from hanging decorations) and financial (unpaid rent), but any other uses for security deposits are illegal. Many landlords are tempted to keep security deposits for standard wear-and-tear that occurs over time, but this is considered mishandling of a tenant’s deposit. Misusing a security deposit can also include more malicious acts like keeping a substantial amount of money for a minor repair or claiming damages that never happened. Some property owners might also withhold a security deposit from a tenant after a rental agreement is up. If no damage has occurred or if an amount for repairs has already been taken out, the rest of the deposit is legally required to be returned to the tenant. The best way to avoid disagreements about a security deposit is to list reasons in your lease agreement that a security deposit might be kept for, like unpaid rent, damaged furniture, holes in the walls, etc. That way, if any part of the deposit isn’t returned to a tenant, you can refer to the specifics of the lease agreement.3. Unlawfully Evicting Tenants
Some tenants are simply no good for your rental business. They break things, are involved in illegal activity on your property, and disturb the peace of other tenants. If you’re looking into evictions, you may have heard of “self-help evictions”, where landlords bypass the proper legal channels and forcefully remove tenants from a unit. As tempting as it may be to take matters into your own hands when a tenant’s behavior is unacceptable, you should avoid this at all costs. Evictions can be necessary in your units, and you may be within your rights to request one, but you cannot evict a tenant without taking the issue to court and receiving legal permission to remove the tenant. This means you cannot change the rental unit locks, remove a tenant’s personal belongings, deny them entry to the building, etc. until a court approves the action.4. Increasing Rent with No Notice
Rent increases are common as the value of a property goes up or inflation increases. Many landlords increase rent periodically, but there are rules to follow when doing so to avoid illegal rent practices. When running a rental business, rent increases are usually fair game, but must be done with proper notice to the tenant and can only be enforced after the current lease ends. Proper notice may vary with state laws, but generally, at least 30 days are required before a rent increase goes into effect, and the tenant must receive written communication of the increase (telling your tenant over the phone won’t legally count). For example, you cannot walk up to a tenant the day before their rent is due and request $300 on top of their normal rent. In this situation, the communication is not written and sent to the tenant, and they’ve been given only one day’s notice to come up with $300. This would be an unenforceable and illegal practice. Additionally, keep in mind that rent stabilized apartments or rent control laws may prohibit you from raising rent a certain amount or within a certain period. If you rent to Section 8 tenants, you must also follow any agreements made with a local housing authority regarding what rent should be charged to a tenant who is part of the program. It's your responsibility to be aware of any local regulations if they exist, since landlord tenant laws vary across both the state and local levels.5. Showing Up Without Notice
After the lease agreement is signed, you lose the right to access the property whenever you want. Because tenants have a right to privacy in their home, you must give prior notice before entering the unit, and it must be for a valid reason (think repairs or inspections). The state and local laws for prior notice vary, but generally, “reasonable notice” is 24-48 hours. You’re also expected to only visit the property during reasonable daytime hours—it’s not appropriate to show up to a unit at 2 A.M. to repair a kitchen sink! The only exception to this is in the case of an emergency, like if a fire breaks out while a tenant is out of town or if the apartment floods and you can’t reach the tenant. If you do enter the property for this reason, you’re still required to leave written notice to let the tenant know you were there. Entering the apartment without proper notice or without reason is illegal and tenants can take legal action against you.6. Harassment or Retaliation
The last thing a tenant wants is an unprofessional property manager who will retaliate if complaints are filed against them. If living conditions or other aspects of a tenant’s time in your unit are unfair, they reserve the right to file a complaint without fear of harassment or retaliation in response. Both landlords and property management companies must be able to acknowledge tenants' concerns and address them fairly without resorting to retaliation tactics. The three most common landlord retaliation tactics are:- Raising rent. You cannot hike your rent prices in response to a tenant complaint about your rental property.
- Decreasing services. Per your lease agreement, tenants are still due the same level of service regardless of any complaints against you. This means you cannot stop doing inspections or repairs (more on this next) to get back at a tenant who filed a complaint.
- Eviction. You cannot evict a tenant who complains about your rental property. If you attempt an eviction, it will most likely be rejected by your state if the action is retaliation for a tenant complaint.
7. Avoiding Inspections
One of the responsibilities you take on when renting out your property is doing periodic inspections of your units. This ensures the safety and habitability of your unit while also making sure your tenants aren’t breaking any rules from your lease agreement. There are several types of inspections you should be conducting in your units:- Routine maintenance inspections
- Health and safety inspections
- Move-in and move-out inspections
8. Avoiding Repairs
Similarly to avoiding inspections, some landlords or property managers may avoid doing repairs, either as retaliation against a tenant or because they’re not motivated to do the maintenance themselves. The burden of fixing maintenance issues in a unit ultimately falls on the landlord, not the tenant, and repairs are required to be done in a timely manner. Avoiding or refusing repairs becomes a legal issue because tenants have the right to timely repairs and to live in a home that meets required health and safety standards. By neglecting your duty of doing repairs and necessary maintenance, you risk the health and safety of your tenants (and leave an unfinished task sitting on your to-do list).9. Not Disclosing Hazards
When writing a lease agreement for a new tenant, it’s essential to disclose any potential hazards (such as mold or lead-based paint) within the unit so the tenant is made aware and has time to decide whether they still want to move in. For example, the Residential Lead-Based Paint Hazard Reduction Act of 1992 (Title X) requires that any houses built prior to 1978 have a lead-based paint disclosure so tenants can be made aware of the risks and health issues of lead-based paint, regardless of the presence of lead-based paint in the unit. Not disclosing this potential hazard can put both you and your tenant in danger, as they could become seriously ill from lead exposure, and you could get into legal trouble if health issues do arise.Hazard disclosures are often simple to fill out, and you can easily find a free lead-based paint disclosure form online to meet this requirement - so be sure to always fulfill this obligation.
Conclusion
No landlord is perfect. It’s possible you’ve unknowingly made one of these mistakes in the past, but with the new knowledge you’ve gained about what landlord and property management practices are illegal and why, you can grow as a landlord and make your units safe, welcoming, and fair for each of your future tenants.
