Everything you need to know about insurance basics, like coverage types, limits, cost and more.
What Are Landlord-tenant Laws and Obligations?
Understanding what the law requires of you as a landlord and how you’re to manage certain aspects of your tenant’s security deposit can be a bit confusing. There’s a lot to consider. Between state, federal and local codes, it’s sometimes difficult to be sure that you’re doing the right thing. As a landlord, you really need to know that you’re operating within the law. Be sure to check in with your real estate attorney before signing your first lease because you’re legally responsible for more than just your tenant’s security deposit. Take a look at our tips on landlord-tenant laws and obligations for details on how to operate your business and keep it safe. You may find new ideas that can help your investment property thrive.
Landlord-tenant laws and obligations require property managers to disclose details to tenants about important security deposit laws and terms that dictate the way the two parties are to interact with one another. These policies define terms on tenant occupancy, and they order property owners to share contact information with tenants. They also discuss minimum requirements for the living space and require landlords to uphold and adhere to the terms in the lease agreement as well as local and state laws. It may sound like a lot to take in, but we’ll break it down into simple terms for you.
What to Do When a Tenant Stops Paying Rent?
When the rent check is late, you’ve got to respond quickly. Review and abide by your lease agreement for the terms that define the steps to take and when to take them. It’s really important that you document each tenant encounter completely when the tenant stops paying rent. Send a note that requires the tenant to take action in order to remedy the situation and be sure to get the tenant to sign for important documents when they are sent. Usually a certified letter sent to the tenant with news of security deposit loss — and potentially being evicted — is enough to stir your tenant into action.
How to Create an Emergency Plan for Tenants
Even though it’s optional, you should consider developing an emergency plan for your tenants. To build a cohesive emergency response plan, you need to anticipate the types of emergencies that occur in your area and build a plan to respond to each scenario. Post highly visible evacuation routes so tenants will know how to get out quickly in case of emergency. Install smoke, fire and carbon monoxide detectors and post fire extinguishers at key locations — both in common areas and within rental units. Train your tenants and employees on the best way to respond to emergencies and you’ll find they’re better prepared when the unexpected happens.
When seconds count, real-time monitoring and alerting can make a huge difference. Install smart technology and let the Internet of Things keep you connected to the condition of your rental. These sensors and devices can trigger a call to first responders in the event of fire or break-ins, and can really help landlords feel more connected to their rental, even when it’s out of state.
Performing Accident Investigations & Creating Reports
Much the same as dealing with workplace accidents, landlords need to quickly investigate both the location of the accident and those involved in it. Interview first responders and take plenty of photos. If repairs need to be made to remedy the situation, get contractors booked ASAP. It’s a good idea to inform your attorney of accidents that happen on your property because they can advise you on the best way to respond to the issue.
If an accident occurs, smartphone apps like PropertyApps and SafetyCulture help to capture details, and track the progress of repairs from beginning to end.
Landlords and Liability
Landlords are usually liable for injuries that tenants or visitors incur as a direct result of the landlord’s negligence. When it’s proven that cause of an injury is the product of a dangerous condition, landlords can be found liable. It’s here where costly lawsuits can impact your savings, so it pays to be sure your property is well-maintained and properly insured. Take a proactive approach by encouraging tenants to report conditions that are dangerous or require repairs and track issues until they’re resolved.
Landlords are also at risk for other liabilities. The careless handling of personal information or slandering a tenant online can sometimes be considered libelous, and may result in expensive civil judgements. Insulate your finances with commercial umbrella insurance. Your primary business insurance may be sufficient to protect you against the usual kinds of loss. But if an award or settlement exceeds the limits of your policy, that additional financial burden falls to you and your business. With regular, scheduled inspections of your property and your tenant’s living space, you can help reduce your liability exposure. Put a safety net around your finances and find peace of mind with this added protection.
Landlord Response Time Requirements and Maintenance
The answer depends on the severity of the problem. If a tenant contacts you and informs you that a window has been broken and rain is pouring in through it, you need to react quickly for a couple of good reasons. By law, landlords promise their tenants a “warranty of habitability” — when an issue impacts that warranty, you’ve got to respond quickly. Typically, a 24 hour board-up service can be called to lock out the elements and that warranty is restored. The task of replacing the glass can usually be handled with less urgency. Always fully document issues that impact the tenant’s warranty of habitability for your records.
Landlords and Eviction Documentation
Evidence, or “cause,” for eviction is always the first thing you’ll need. Carefully document the details: dates, times and correspondences should all be kept on file. If the tenant has violated the terms of the lease, you’ll likely be required to deliver a “Notice To Quit or Pay” — a formal document — informing the tenant that they must move out by a given date or number of days. After that period has expired, you’ll begin eviction proceedings. Be sure to check in with your attorney before you file, and verify you’re working within the state and local laws.
Evictions happen for many reasons, so outline them in your agreement. Write your lease with the assistance of a real estate attorney. Be sure it carefully covers other circumstances that can result in an eviction. If illegal drugs are present, being produced or sold on your property, that may be cause. And excessive noise that disturbs neighbors after designated quiet hours may be as well. Other issues like property damage or certain legal/criminal situations involving your tenant may be cause for eviction.
Landlords and Homeowners Associations (HOAs)
An HOA is the legal entity that governs the business affairs of planned communities. They also pay for the maintenance and upkeep of common areas with a monthly or annual fee charged to each member. Although HOAs may cover structure protection, they usually don’t cover the personal belongings inside those structures. That’s why it’s so important to review the many benefits of renters insurance and to require it of your tenants.
If you’re considering a rental property purchase that has an HOA, be sure to check their bylaws first and verify that they allow owners to rent out their unit. Carefully examine them for other rules and be sure to include in your agreement terms stating that the tenant will abide by all HOA rules and bylaws.
What Landlords Should Do With Abandoned Personal Property
Some state laws require that you have to hold onto tenant property for a number of days before you’re allowed to throw it away, sell it or keep it. However, if the items left in or on the property pose a health or safety risk, you may need to act fast — contact local authorities for assistance. A good idea is to include a few clauses in your lease agreement that impose fines for personal items left behind because it’s going to cost you time and money to deal with these items.
Protect Your Property With Landlord Insurance?
Your rental property is a business. Like any other commercial investment, you need to insure it carefully. The good news is that the insurance options available to you with American Family can be tailored to fit your exact business. Have a company car? We’ve got a business auto policy just for you. Does your rental property have an office? We’ve got you covered. As small business owners themselves, American Family Insurance agents are a lot like you. They can play a key role in the future success of your rental property by protecting your finances. Get in touch an American Family agent today and discover the products and services available to landlords and learn how landlord insurance is the right move for your rental business.
This article is for informational purposes only and based on information that is widely available. This information does not, and is not intended to, constitute legal advice. You should contact an attorney for legal advice specific to your situation.