Property Management

Essential Legal Knowledge for Income Property Owners

By October 24, 2023 January 17th, 2024 No Comments

Landlords should become familiar with state and city-specific landlord-tenant laws to avoid legal or financial consequences for themselves and their tenants. Landlords should not reject applicants based on criminal history alone unless it relates directly to their rental application.

There are many essential legal things you should know when you are an income property owner. Of course, this all becomes easier when you have the right property management company to help you understand all the ins and outs of tenant/landlord law, along with the different agreements you will need. 

Here are some of the things you should understand when it comes to legal knowledge as an income property owner.

Lease Agreements

Lease agreements are legally binding contracts that serve to govern the relationship between property owners (lessors) and tenants who wish to occupy it for an agreed term. They detail such details as rent amount due, timing of payments, and penalties associated with late or other violations as well as pet policies, utility service providers, and any other relevant details.

Landlords must give tenants at least 24 hours notice before entering a leased property to make repairs or show it to prospective renters, though in an emergency a landlord may enter without giving prior notification.

Tenants may terminate their lease early under certain conditions, such as relocation for work or financial hardship caused by divorce. At the conclusion of tenancy, they must return the property. A landlord may place a lien against personal belongings to cover unpaid rent payments.

Security Deposits

Landlords collect security deposits from tenants as an assurance that rent will be paid on time and no damage or other deterioration will occur to the property. Most states place limits on how much a landlord can collect in this way and how these funds should be spent before returning them after tenants move out.

Some states mandate that landlords maintain security deposit funds in an interest-bearing account throughout their lease, while others mandate reporting any interest earnings to tenants upon ending their tenancy. Furthermore, localities often impose additional requirements such as inspections before collecting deposits or providing an itemized list of deductions after a tenant moves out.

Alternatives to security deposits may include lease insurance and surety bonds, both of which typically involve making an upfront payment to a 3rd-party bond issuer followed by monthly fees covering damage caused to the property or other expenses associated with renting it out.

Disposing of Abandoned Personal Property

Tenants moving out of rental properties typically leave behind personal items they no longer require, which necessitate the landlords comply with various state-specific obligations on how to dispose of this property.

Landlords in New York cannot sell or dispose of tenants’ belongings until they have proof that the tenant abandoned them, and must store them for a specific period before disposing of them; the exact length of time varies by state.

Abandoned property laws cover items left behind either before or after an eviction by tenants. Landlords may charge storage or disposal fees depending on local regulations; any costs charged depend upon specific statutes; either way, landlords must follow an established procedure otherwise they risk legal ramifications; this is why it’s vitally important to draft a lease agreement that sets forth what must happen with abandoned property.

Evictions

Escaping from tenants can be both expensive and time-consuming for landlords. When facing the eviction process, landlords must abide by strict rules in order to evict tenants legally; any attempts at self-help such as locking out tenants or cutting utilities without legal justification are prohibited and illegal.

After tenants vacate, landlords are legally required to store any abandoned personal property of value for at least 30 days before disposing of or disposing of it without first notifying the tenant in writing of this intention. They cannot dispose of a tenant’s belongings without first giving proper notice and providing proper valuation.

Landlords must comply with numerous rules. One such regulation is the Fair Housing Act, which protects people against discrimination when renting, buying homes, or seeking public assistance for housing. This law prohibits discrimination based on race, national origin, religion, sex, familial status, or disability – it even protects tenants against any retaliation for reporting violations or filing lawsuits due to landlord misconduct.

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