In the real estate market, there are different types of landlords. Some are experienced, and some start the business with the first property. Whether you have been in the real estate business for a long or starting it now, you need to understand some rules and regulations. Here are some illegal practices you must avoid; otherwise, you might have to face legal issues, and you will be known as a bad landlord.
Changing rent rate before the lease ends
Sometimes landlords feel that the house's rent is less than other neighboring houses, and they increase the rent in the middle of the lease period. You can increase the rent at the end of the leasing period. Usually, it is a term in the leasing contract, so you must abide by it. However, if you have to increase the rent for property repair or improvement, discuss with the tenant first. If they agree, you can increase the rent. However, check the local laws first. Moreover, there is a limitation on the rent increase. The landlord can increase a certain percentage of the rent; above that, it will be considered illegal.
Evicting tenant to sell the house
Every landlord has the right to sell the house whenever they want, but it can be illegal if you evict the tenant before the end of the lease. It is against the tenant's rights to evict them in the middle of the lease. If the sale is inevitable, you have to consult the tenants and discuss the problem. They can ask for compensation if you have to sell the house immediately. But don't take any decision without discussing it with tenants. It's better to delay the deal till the end of the lease.
Breaching the privacy of tenants
Privacy is the right of everyone, and if you are a landlord, you shouldn't enter the house without prior notice to your tenants. You can enter the house if it is an emergency; other than that, you have to notify them first. Whether it's an inspection visit or for the supervision of maintenance activity, a landlord cannot enter the house without notifying the residents.
A landlord needs to do a proper inspection before the tenant moves in. It is considered an illegal management practice if you fail to do so. You need to complete different types of inspections; it includes occupancy inspection, fire inspection, and habitability inspection. Usually, landlords avoid this inspection as they add to the expenses. But if you have not done these inspections and concerned authorities caught you, you have to pay heavy fines. So, complete the inspections without any delay.
Evicting a tenant due to non-payment of rent
The last thing landlord wants is the tenant who doesn't pay the rent. However, you cannot throw a renter out of your house until you take proper legal steps. This can be a lengthy process, but it is very important to follow the legal procedure. If you don't follow the rules, you can have legal problems.
Evicting tenants due to nuisance they create
This is one of the most common reasons for the eviction of tenants. Tenants create problems for the landlords in different ways. The nuisance can be of different types; it can be noise, creating a mess or damaging the building. However, you have to follow the proper legal process for that. Evicting them right away is an illegal management practice.
Inconsistent screening process
You have to devise a screening process and follow every application you receive. Using different screening processes for different applicants is against the law. Make sure you are not discriminating based on race, religion, color, disability, and sex. Screening tenants based on these criteria is illegal, and you must avoid that.
Illegal deduction from the security deposit
The landlord cannot deduct money from the security deposit other than specific damages. Some landlords deduct money for fake repairs and damages. You can deduct money for unpaid rent and damages caused to the unit but not for wear and tear. So, make these deductions very carefully.
Asking for a high-security deposit
Sometimes landlords ask for a huge security deposit, but you have to keep in mind that you have to return it at the end of the lease. There are some local laws about the number of security deposits, so get information about them first. Usually, monthly rent is the limit, and you cannot charge a security deposit more than the monthly rent.
Repairing the house is the landlord's responsibility; the house should be safe for the tenant. If something is threatening the safety or health of the tenant, the landlord is supposed to repair it as soon as possible. Repairs can be costly sometimes, so landlords try to avoid them. This is an illegal management practice, and the tenant can take legal action against you. So, whenever a tenant asks for a repair, take the matter seriously.
Don't threaten complaining tenants
Some tenants complain a lot, and landlords don't like them. It is very annoying to have complaining tenants, but you need to handle them professionally. Treat it professionally and wait patiently to end the lease period no matter what the complaint is about.
These are just a few illegal property management practices, and if you are a landlord, you have to avoid all of them. Any of these practices can cause a legal problem for you. in some severe cases, you can even lose property ownership. If you want to establish yourself as a real estate investor, you must avoid all these practices. If a tenant is creating a problem, take legal action against them or wait for the lease period to end. It is very important to know the local laws as well. Sometimes you can breach a law just because you don’t know about that. Being ignorant is not an excuse; you must know the rules if you are part of an industry.