When it comes to investing in rentals, most property owners are great at hoping for the best but often don’t have the right knowledge to protect themselves fully. If you own rental property without preparing for the many potential legal pitfalls associated with your investment, the risks can really cost you. With lawyer fees averaging around $400 dollars per hour in San Diego, a single legal issue can wipe out the entire annual profit from a rental property.
This is not intended to be legal advice, We’d just like to share some topics you should have a good knowledge in if you are managing your own property.
Discrimination & Fair Housing
The Americans with Disabilities & Fair Housings Acts requires that you not discriminate against potential tenants with disabilities or make housing decisions based on race, color or national origin, just to name a few. This includes putting any restrictions or charges on service animals.
Habitability laws vary from region to region and require that your rental property provide a safe, comfortable living environment for tenants. If you neglect these items like heaters or plumbing, respond slowly or ineffectively, or require tenants to pay for them you can end up facing a lawsuit.
Some property owners may try to cut costs by making repairs themselves or hiring unlicensed labor. Poorly completed repairs or worse: the injury of an unlicensed repair person can lead to very costly lawsuits. So be conscientious and hire only licensed and insured service personnel.
Some of the most hefty fines are imposed for improperly handling security deposits. Be sure you are handling them properly and know what you can and can’t charge the tenant for.
As a property owner you have access to the personal information about your tenants and you are required to keep that information secure. Be sure to keep this private data confidential both in what you share personally and how you store your records.
Put simply – rental property owners must understand and stay current on all federal, state, local and industry laws, codes and regulations to avoid litigation, liability, and expense. It is critical that you or your professional property manager remain constantly vigilant and current on all applicable requirements to help you avoid some very costly mistakes.