Renting your property is a great source of income if you go into it with enough preparation and knowledge. Here are five legal tips all landlords should know about renting apartments:
1. Insurance is your friend
Make sure you secure enough property and liability insurance. Many companies specifically offer “Landlord insurance.” Typically, this type of insurance will cover loss sustained due to lightning, earthquakes, storms, leaks, subsidence and theft, but each insurance policy differs so they may or may not cover all types of loss. Landlord insurance should cost slightly more than homeowners insurance. Landlord insurance does not cover the personal property belonging to tenants, so you should either suggest that tenants acquire renters insurance or require it in your rental agreement.
2. Know your tenants’ rights
As a landlord, you must not infringe on a tenant’s right to privacy and you have a duty to disclose certain environmental hazards, like whether there is lead or mold on the property. Your state may also require other disclosures, like whether a person has died on the property within the last three years. Additionally, when terminating a lease before the date specified on the rental agreement, you must comply with certain legal formalities by giving your tenant proper legal notice, which is 30 or 60 days, depending on the situation.
3. Know your rights as a landlord
On the other hand, landlords have rights that the tenant must respect. Once you provide adequate notice to the tenant, you must be allowed to enter the premises in order to conduct maintenance checks or make repairs. You also have a right to evict a tenant when he or she violates any provision of the lease. This entails an unlawful detainer action in California, and it varies in each state. Knowing your rights and the responsibilities owed to your tenants can prevent unnecessary time and money spent on a legal dispute.
4. Screen Screen Screen
You need to trust the person that will rent your property. Be sure to ask the prospective tenant about their income, employment and credit history and to provide references that include previous landlords. A credit report will reveal bankruptcies, late bill payments, and evictions. Have the prospective tenant complete a Rental Application and submit a pay stub or bank account statement to verify their ability to pay rent. Choosing the right tenant can prevent problems down the line, so research and be picky.
Also, employees that you hire to manage or maintain your property can subject you to personal liability if their actions subject your tenants to injury. It is wise to conduct background checks on all employees. After hiring, provide clear job responsibilities to prevent future mishaps.
5. Find trustworthy handymen before you need them.
Mishaps and late-night maintenance emergencies are bound to happen. Keep a list of trustworthy locksmiths, plumbers and repairmen that are willing to come to the property at all hours of the day. When a 3 a.m. disaster happens, you’ll save you and your tenants time and heartache if you know the right people to call. Locksmiths should be accredited/licensed according to your city, county, or state laws, so ask to see this documentation when you hire one. Additionally, a “bonded” locksmith or plumber is essentially a guarantee that the work performed is satisfactory and you will be reimbursed in the event something goes wrong that results in property loss. This is slightly different from insurance, which protects against certain types of losses, not necessarily connected to the quality of work completed by the tradesman. Make sure that you hire workers that are both bonded and insured.