Understanding Landlord Tenant Laws
October 3, 2022
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Landlord Tenant Laws That You Need To Know
Both landlords and tenants have legal rights and responsibilities.
By entering into a lease agreement, you become subject to a group of laws that dictate your rights and responsibilities. These laws are broadly called landlord-tenant laws. They encompass all legislation dealing with the interactions between landlords, tenants, and properties.
Although there are several key federal regulations, most landlord-tenant laws are set by state governments. The federal government protects tenants’ right to equality in a few landmark laws, but it leaves the finer points (security deposits, late fees, etc.) to the states.
Some states’ laws favor landlords, while others tend to benefit tenants.
Part of your job is to know the rules and regulations for landlords forward and backward. Not only do these laws guide your rental practices, but they also protect you from lawsuits and needless legal predicaments. Court fees for violations can cost thousands. Therefore, it’s crucial to know and follow all the federal, state, and local laws that apply to you.
This article will highlight the most important landlord-tenant laws, from federal acts to common state and local ordinances.
Leases and Required Disclosures
Landlords are required to have a written lease agreement in most states. The lease, or rental agreement, is your most basic responsibility as a housing provider.
Written agreements clarify discrepancies and settle disagreements. They also protect you in court. For example, even if you show months’ worth of late fee charges, the court has little proof your renter violated the agreement without a written document specifying the original rate.
At minimum, your lease agreement should include the names of all parties and their contact information, the property and lease details, the number of occupants, the rent rate, and all your rental policies.
Landlords are required to disclose certain information in lease agreements. There is only one federally mandated disclosure: You must disclose lead-based paint hazards for buildings constructed before 1978.
All others are dictated by state or local law. Common state-mandated disclosures include existing property damage, recent flooding, health hazards (such as mold, radon, pests, or methamphetamine contamination), nonrefundable fees, energy efficiency details, and the identity and role of the property manager.
Many states also require you to provide a summary of landlord-tenant law, information about registered sex offender databases, or rights and resources for victims of domestic violence.
Local disclosures often pertain to rent control. Local rent control ordinances might require you to disclose the name of the local agency responsible for the ordinance.
Never assume that a disclosure isn’t required in your state or county. Check with local authorities to learn which disclosures apply. Try asking a landlord-tenant attorney, browsing local ordinances online, or calling your county administrator or city attorney’s office.
Rent and Security Deposit Laws
The states determine laws pertaining to rent and security deposits. Currently, there are only five states with rent control regulations: New York, New Jersey, Oregon, Maryland, and California. These states prevent landlords from increasing rent by more than 2-10%.
Other state legislatures are still in the process of proposing and approving rent control laws.
Security Deposit Limits
Security deposits are unregulated in twenty U.S. states. The remaining states limit the amount of the security deposit a landlord can charge to one to two months’ worth of rent.
Some states (like Ohio) require landlords to pay interest on the deposit if the tenant stays longer than six months. For example, an Ohio landlord who collects a $700 security deposit with a 5% interest rate would have to return $735 if the tenant moves out after one year.
In addition to amount limits, most states also decide the circumstances under which you may withhold and use the deposit. Check with a local authority to be certain your security deposit policy is lawful.
Late Fee Limits
Late fees limits are also dictated by state law. In general, late fees must be considered reasonable, or they won’t hold up if challenged in court. “Reasonable” means that the fee is less than 5% of your rent rate and only charged when rent is three or more days late.
Approximately half of the states have specific laws regulating late fees. However, most states agree that late fee policies should be delineated in the lease agreement, that fees shouldn’t exceed 5-12%, and that landlords should wait 3-5 days after the due date to charge late fees.
Fair Housing Laws
Fair housing laws are the most substantial and far-reaching of all landlord-tenant laws. They are also the most imperative to follow. Set by the federal government, the right to fair housing is defended fiercely in court.
Violating a fair housing law is costly in more ways than one. Not only could legal and attorney fees cost you thousands, but the injury to your reputation is possibly more damaging. Give the following laws extra study as you prepare to screen and move in your tenants.
Federal Fair Housing Act
The Federal Fair Housing Act (FHA) is a landmark law in housing. It prohibits housing providers from discriminating based on seven classes. These federal fair housing protected classes include race, color, religion, sex/gender, national origin, familial status, and disability.
The FHA was established in 1968, just after the assassination of Martin Luther King, Jr. It applies to every realm of real estate, from sales and rentals to mortgages and financing.
You should pay particular attention to the FHA during tenant screening. Standardize your screening process by performing the same checks, in the same order, for every tenant (including any social media checks). We recommend using a tenant scoring system, which is a weighted point system for evaluating applicants’ eligibility. Tenant scoring systems are objective and serve as an adequate justification for a denial during a lawsuit.
Likewise, your advertisements may not suggest a preference for a particular type of renter, nor can you steer renters away from any units during a showing. You must inform prospective renters of all vacant units.
The penalties for violating the FHA are severe. The U.S. Department of Housing and Urban Development (HUD) charges civil penalties up to $20,111 for a discrimination violation. Once a tenant files a complaint, it can be heard by either a Federal District Court judge or a HUD Administrative Law Judge (ALJ). ALJ fees can cost up to $16,000. The time and money to defend these claims—and the potential damage to your business’s reputation as a fair housing provider—simply isn’t worth it.
State and Local Fair Housing Laws
State and local fair housing laws are often even more expansive than the FHA. Some states add age, citizenship, veteran status, marital status, and source of income as protected classes.
Fair Credit Reporting Act
The Fair Credit Reporting Act (1970) is a federal law that regulates what credit reporting agencies can do with the data they collect. The law protects the privacy of consumer information.
Under this law, landlords must obtain an applicant’s permission to run a credit check (usually a signature as part of a rental application). In addition, you must tell renters if their score is the reason for their denial.
Americans with Disabilities Act
The Americans with Disabilities Act (ADA) outlines disability rental rights and protections.
The ADA also requires landlords to provide “reasonable accommodations” to tenants with disabilities. Renters with disabilities may request that you change your rental policies or physical spaces to accommodate their disability. Although you must allow the modifications, you can require the tenant to pay for extensive ones (within reason) or return the unit to its original condition when the tenant moves out.
Accommodations do not take away your basic rights as a landlord, such as the right to collect rent.
Pet and Service Animal Laws
The ADA also protects tenants’ right to own assistance animals, such as service animals and emotional support animals (ESAs).
Service animals are trained to assist and perform specific tasks for an individual with a disability. For example, a service dog might help a blind person navigate or keep a person with epilepsy safe during a seizure.
ESAs are untrained animals that provide comfort or companionship to a person with a disability, often anxiety or PTSD.
The federal government requires landlords to make reasonable accommodations to rental spaces and policies for assistance animals. This includes waiving your “no pets” policy—you cannot deny a renter from having one or deny a renter’s entire application because they own one.
The tenant’s responsibility is to provide a physician’s note indicating that 1) they have a disability (it’s not necessary to specify which one) and 2) that the assistance animal is part of treatment for the disability (again, no need to explain how or why).
Because service animals and ESAs are not pets, you also cannot charge pet rent or fees. Tenants are, however, responsible for any damages caused by their assistance animal.
Safety and Privacy Laws
Alarms and Security
All landlords must make rentals fit and habitable. This means complying with all health and building codes. Of these, the most critical codes require you to maintain working smoke alarms, carbon monoxide detectors, and fire extinguishers in all units.
You must also provide proper security. The specific security measures you are required to uphold are dictated by state laws, and may include installing deadbolts, adding window locks, and periodically changing the locks (e.g., between tenants).
If you don’t provide sufficient security to your tenants, you could be liable for break-ins or other criminal activity.
Right and Notice of Entry
Landlords must also fulfill expectations of privacy. Alongside livability and health, tenants have the right to quiet enjoyment of their units without excessive disturbances for maintenance, repairs, or inspections.
The court will uphold tenants’ right to quiet enjoyment regardless of whether it’s in your lease. Some states even set consequences for violations, such as rent refunds.
You do have the right to enter your properties at reasonable times, provided you give proper notice. In most states, you must give at least 24 hours’ notice.
Like most laws here, eviction laws are up to the states. In general, you cannot evict a tenant without probable cause. You must prove that they violated the lease agreement.
Many states have other eviction regulations regarding partial payments and supplying a late rent notice before eviction (often three days).
You can’t evict a tenant as retaliation because they reported a housing violation or complaint against you, no matter how damaging it was. This is called the doctrine of retaliatory eviction. Evictions with this motive do not hold up in court.
A constructive eviction occurs when a landlord purposely neglects a property or allows it to become unlivable to force a tenant to leave. In this case, tenants can file a constructive eviction claim and seek damages.
In March 2020, the federal government stepped in to help tenants afford rent during the pandemic. The CARES Act instated nationwide eviction bans. It expired in 2021, but state and local bans may still apply.
Researching landlord-tenant laws is hardly the most exhilarating work. However, it’s worth every hour you spend. A strong legal foundation is a critical part of your education as a new landlord. Knowledge is your best protection against unexpected legal dilemmas. Avoid the courtroom and protect your rental goals by knowing these landlord-tenant laws by heart.