- ISBN: 9781119896340 | 1119896347
- Cover: Paperback
- Copyright: 9/7/2022
Howdy, landlord! Get on the right side of the law with Dummies
Landlord's Legal Kit For Dummies contains all the resources landlords need to unpack the legal side of renting properties. Inside you'll find worksheets, templates, and friendly explanations that will help you find success. Once you have your property and your tenants, you'll need to make sure you operate within your rights, complete all the necessary admin, and handle taxes in an accurate and timely way. This book can help you do just that, with the latest paperwork, helpful details and examples, and a breakdown of taxes and laws. Plus, you can go beyond the book by accessing online documents that take your learning to the next level.
- Understand all the latest housing laws that pertain to your specific rental situation
- Find drafts of all the legal forms you’ll need as a landlord
- Access easy-to-use tax worksheets and clear descriptions of tax rules without legal jargon
- Recognize your rights as a landlord and understand your tenants' rights
This is the perfect Dummies guide for both new and experienced landlords who need a hands-on legal reference for all the laws surrounding rent, rental properties, and tenants.
Robert Griswold is President of Griswold Real Estate Management Inc and has served on the Counselors of Real Estate. Robert is the author of several Dummies titles.
Laurence (“Laurry”) Harmon is President of Harmon Law LLC. He specializes in real estate law and provides extensive teaching, market research, and consulting on real estate subjects.
Introduction 1
About This Book 1
Foolish Assumptions 2
Icons Used in This Book 2
Beyond the Book 3
Where to Go from Here 3
Part 1: Getting Started with Landlording Fundamentals 5
Chapter 1: The Legal Fundamentals of Managing Residential Rentals 7
Running Your Operation as a Corporation or LLC 8
Taking Ownership of a Rental Property 8
Avoiding the Legal Pitfalls of Managing Residential
Rental Properties 10
Obeying fair-housing laws 10
Setting rents and payment policies 13
Screening applicants 13
Drafting a lease or rental agreement 15
Managing security deposits 15
Moving tenants in and out 16
Fulfilling your maintenance and safety obligations 18
Dealing with co-tenants, sublets, and assignments 21
Terminating rental contracts 22
Chapter 2: Protecting Your Legal Assets 23
Forming Your Business 23
Choosing a legal structure 24
Exploring ways to incorporate 28
Knowing the Law or Consulting Someone Who Does 30
Conducting your own legal research 30
Turning to an attorney 34
Preparing for and Paying Taxes 36
Making sense of income taxes 37
Grasping (and appealing) property taxes 46
Chapter 3: Taking Possession of a Rental Property 49
Knowing What to Get Up-Front 50
A comprehensive list of the personal property included in the sale 51
A copy of the entire file for each current tenant 52
A seller-verified rent roll and list of all security deposits 52
A copy of all required governmental licenses and permits 53
A copy of all the latest utility bills 54
A copy of every service agreement or contract 54
A copy of the seller’s current insurance policy and loss history 55
Insuring Your New Property 57
Understanding the different types of insurance coverage 58
Finding the right insurance company 61
Determining the right deductible 62
Talking with Tenants about Renter’s Insurance 63
Handling Potential Claims 63
Working with the Current Tenants During the Transition 64
Meeting the tenants in person 64
Inspecting the property 64
Inspecting the rental unit 65
Using a new lease or rental agreement 66
Evaluating the current rent 67
Chapter 4: Hiring a Property Manager 69
Your Property Management Options 69
Using a property management firm 70
Hiring an individual 71
Doing it yourself 71
Hiring a Professional Property Management Firm 72
Finding the right company for you 73
Knowing what to ask a prospective management company 75
Compensating your property manager 77
Sidestepping pitfalls 79
Being aware of the tax consequences 80
Going with an Individual to Manage Your Property 82
Screening candidates 82
Signing an employment agreement 86
Compensating your property manager 86
Complying with employment laws and accounting requirements 87
Understanding independent contractor versus employee status 88
Firing and evicting an employee 90
Notifying Tenants of a Change in Management 92
Part 2: Advertising and Taking on New Tenants Legally 93
Chapter 5: Getting Current about Fair Housing 95
Examining the Fair Housing Act 96
Recognizing the seven protected classes 96
Identifying conduct that constitutes discrimination 97
Identifying conduct that constitutes preferential treatment 98
Meeting the three conditions of a violation 100
Including principals and agents 100
Knowing what you’re allowed to do under the law 101
Noting exceptions to the law 102
Paying the price for infractions 102
Digging Deeper into the Sex, Familial, and Disability Protected Classes 103
Sex 103
Familial status 104
Disability 107
Companion or service animals 112
Exploring Additional Protected Classes at the State and Local Levels 114
Steering and chilling 115
Minors 117
Safeguarding from Claims of Housing Discrimination 118
Taking a proactive/preventive approach 118
Taking a reactive/corrective approach 122
Chapter 6: The Legal Aspects of Advertising 125
Applying the Fair Housing Act to Residential Rental Property Advertising 126
Understanding the law 126
Complying with the law 128
Adhering to Truth-in-Advertising Laws 134
Accurately describing the rental units 134
Disclosing any important policies 135
Presenting rents and amenities accurately 135
Avoiding bait-and-switch advertising 136
Advertising on the Internet 136
Chapter 7: Rent Collection and Rent Control 139
Creating a Written Rent Collection Policy 140
When rent is due 141
Where rent is paid 143
How rent is paid 146
Dealing with Rent Collection Problems 148
Collecting late rent 148
Charging late fees 150
Handling returned rent payments 152
Dealing with partial rent payments 152
Serving legal notices 153
Raising the Rent without Sending Your Tenants Running 154
Figuring out how to raise the rent 154
Recognizing restrictions on rent increases 155
Keeping your tenants (relatively) happy 155
Giving tenants advanced notice 156
Dealing with Potential Rent Regulation Issues 157
Determining whether your property is subject
to rent regulation 157
Increasing rents 159
Being extra careful when evicting a tenant 161
Closing down a rent-regulated property 162
Taking Advantage of Government Programs 162
The scoop on rental subsidy programs 163
The lowdown on the Housing Choice Voucher program 164
Chapter 8: Screening Applicants 171
Preparing a Legal Screening Policy and Letter of Consent to Background Checks 172
Setting criteria for acceptance 172
Starting with a boilerplate screening policy and making adjustments 173
Getting consent for a background check 181
Developing Your Rental Application 182
Knowing Your Options When Screening 183
Taking the do-it-yourself approach 183
Outsourcing to a screening service 184
Charging a fee to cover your costs 185
Notifying Unqualified or Less-Qualified Applicants of
“Adverse Action” 186
Keeping Essential Records 188
Keeping records for rejected applicants 188
Maintaining tenants’ files 189
Securing sensitive information 189
Chapter 9: Composing Your Rental Contract 191
Eyeing the Need for a Rental Contract 191
Comparing leases and rental agreements 192
Realizing the importance of putting the agreement in writing 193
Starting with a State-Specific Template 196
Customizing the Lease Template 196
Introductory language 197
Rental unit 198
Rent 199
Security deposit 200
Term 201
Utilities 202
Cash payment 203
Occupants 203
Prohibitions 203
Smoking prohibition 204
Quiet enjoyment 205
Fines and penalties 205
Repairs and alterations 206
Acceptance of premises 206
Care, cleaning, and maintenance 206
Landscaping 207
Smoke detection device 208
Carbon monoxide detection device 208
Renter’s insurance 209
Waiver of breach 209
Joint and several liability 210
Entry 211
Subletting and assignment 211
Breach of lease 212
Sale of property 213
Notice 214
Addenda 214
Entire agreement 215
Credit report 215
Attorney’s fees 216
Signatures 217
Considering Additional Provisions 218
Delay of possession 218
Delivery of notices 218
Pets 219
No illegal use 220
Notice of injuries 220
Delay in repairs 220
Notice of absence from premises 221
Abandonment 221
Materiality of application to rent 221
Remedies not exclusive 222
Destruction of premises 222
Eminent domain 223
Governing law 223
Chapter 10: Establishing a Security Deposit Policy 225
The Legal Uses of Security Deposits 226
Deciding How Much to Charge as a Security Deposit 228
Setting separate deposits for pets 229
Considering security deposit alternatives 231
Avoiding nonrefundable deposits 233
Exempting Ordinary Wear and Tear 234
Distinguishing damage from ordinary wear and tear 234
Assessing damage with move-in and move-out checklists 236
Safeguarding and Returning Security Deposits 237
Holding security deposits in a separate account 237
Using a security deposit itemization form 238
Keeping receipts for repairs and cleaning 240
Deducting from the security deposit 240
Paying interest on security deposits 242
Collecting damages and unpaid rent in excess of a security deposit 243
Handling security deposit disputes 244
Chapter 11: Moving in a New Tenant 245
Agreeing on the Move-In Date 246
Meeting with a New Tenant Prior to Move-In 247
Establishing your policies and rules 247
Reviewing and signing legal documents 249
Transferring the utilities to the tenant 252
Collecting the rent and security deposit 253
Inspecting the property with your tenant 254
Providing an informational letter 258
Taking crime prevention measures with a rental unit 260
Keeping Detailed Tenant Records 261
Choosing a Reliable Means of Communication 262
Part 3: Recognizing Your Responsibilities and Liabilities 265
Chapter 12: Repairing and Maintaining the Premises 267
Honoring Your Duty to Maintain Habitable Housing 268
Defining “habitable” 268
Adhering to local codes 269
Preventing and eliminating nuisances 270
Protecting minors 272
Suffering the consequences of falling short 273
Informing Tenants of Their Legal Obligation to Maintain Their Units 275
Knowing your tenants’ responsibilities 275
Seeking damages when tenants fall short 277
Putting a Proactive and Responsive Maintenance and Repair System in Place 277
Recognizing the benefits of a proactive and responsive system 278
Establishing a policy and setting goals 279
Conducting regular maintenance and repair inspections 280
Responding to tenants’ maintenance requests 281
Dealing with Tenants Who Withhold Rent 284
Exploring Contractor-Related Legal Issues 285
Hiring licensed, bonded, and insured contractors 286
Insuring uninsured workers 287
Getting warranties to cover the work 287
Chapter 13: Minimizing Injuries from Potentially Dangerous Conditions 289
Preventing Injuries in Rental Units and Common Areas 290
Using materials safer than standard glass 290
Using safe cords (or no cords) for window coverings 291
Using anti-tip brackets for free-standing ranges 292
Securing swimming pools, spas, and hot tubs 293
Ensuring limited access to construction sites 293
Improving exterior lighting 294
Preventing injuries from animals 295
Focusing on fire safety 296
Preparing for natural disasters 298
Identifying Potentially Dangerous Conditions 299
Encouraging tenants to report safety concerns 299
Conducting regular inspections 299
Evaluating Your Legal Liability 301
Negligence 301
Failure to maintain or repair 301
Violation of a health, safety, or building code 302
Reckless or intentional acts 302
Chapter 14: Preventing and Minimizing Hazardous Environmental Conditions 303
Clearing the Air Your Tenants Breathe 304
Asbestos 304
Carbon monoxide 306
Formaldehyde 308
Radon 309
Assessing and Limiting Your Liability for Lead Paint and Mold 311
Lead-based paint 311
Informing and protecting tenants during repairs and renovations 315
Mold 315
Preventing and Exterminating Pests 316
Preventing and Eliminating Hazardous Waste 318
Determining whether something is a hazardous waste 319
Identifying common sources of hazardous wastes 319
Educating tenants and staff about proper use and disposal of hazardous substances 321
Figuring out who’s legally liable for cleanup 321
Chapter 15: Protecting Tenants and Workers from Criminal Acts 323
Your Obligations and Legal Liability 324
Knowing your responsibilities 324
Grasping the potential costs of lax crime prevention 325
Taking Practical Crime Prevention Measures 326
Turning to a crime prevention program 326
Taking necessary crime prevention precautions 327
Educating and connecting tenants 330
Enhancing crime prevention measures 332
Securing Your Business 333
Safeguarding the rental office and tenant records 334
Maintaining control over locks and keys 335
Screening potential employees 335
Keeping tabs on employee behavior 338
Dealing with Troublesome Tenants 339
Responding to general criminal behavior 339
Handling domestic issues 341
Dealing with drug users and dealers 341
Being Truthful about Safety and Crime 342
Chapter 16: Understanding Tenant Privacy and Your Right to Enter the Premises 345
Balancing Owner and Renter Rights 346
Exploring the influence of contract and property law 346
Honoring the implied covenant of quiet enjoyment and warranty of habitability 347
Looking into state statutes 347
Stating your right to enter the premises in your rental contract 349
Exercising Your Right to Enter an Occupied Rental Unit 350
Building rapport with tenants 350
Entering a rental unit only when necessary 351
Giving tenants advance notice and getting permission 351
Responding to a tenant’s unreasonable refusal to let you enter 353
Counting the potential costs of abusing your right to enter 353
Honoring Additional Tenant Rights: Do’s and Don’ts 354
Implementing a reasonable overnight guest policy 354
Don’t release information about a tenant 355
Don’t call or visit a tenant at work 356
Don’t be snoopy 356
Don’t ostracize a tenant you don’t like 357
Chapter 17: Resolving Landlord-Tenant Disputes 359
Settling the Most Common Problems 359
Late-, partial-, or nonpayment of rent 360
Additional occupants 361
Inappropriate noise level 363
Unsupervised minors 365
Consulting Your Attorney for Advice 366
Resolving Problems without Eviction 366
Hashing it out: Listening and talking 367
Bringing in a mediator 368
Writing a warning letter 370
Taking a tenant to small-claims court 370
Encouraging a voluntary move-out 371
Avoiding Retaliation 372
Part 4: Changing and Ending Leases 373
Chapter 18: Handling Co-Tenancies, Sublets, Assignments, and Guests 375
Recognizing Legal Issues Involving Nontenants 376
Understanding co-tenancy and why it matters 377
Dealing with Common Co-Tenant Issues 378
Deciding who pays the rent 378
Raising the rent and security deposit 379
Taking a hands-off approach to co-tenant disputes 380
Terminating a co-tenant’s lease 381
Deciding Whether to Allow Subleases or Assignments 382
Chapter 19: Revising and Terminating Rental Contracts 383
Changing the Rental Contract Terms 383
Terminating a Rental Contract 385
Terminating a lease 385
Ending a rental agreement 387
Dealing with a tenant’s termination of the rental contract 388
Requiring an intent to move out notice 389
Accepting rent after the lease ends 389
Prorating rent 390
Evicting Troublesome Tenants 391
Serving legal notices 391
Filing a formal eviction action 392
Following the do’s and don’ts of the eviction process 394
Collecting judgments 395
Chapter 20: Moving a Tenant Out 397
Requiring Written Notice of Your Tenants’ Move-Out Plans 398
Providing Your Tenant with a Move-Out Information Letter 398
Conducting the End-of-Lease Inspection 399
Thoroughly inspecting the property 400
Completing the move-out checklist 401
Taking photos to document any damage 401
Reclaiming an abandoned rental unit 402
Part 5: The Part of Tens 403
Chapter 21: Ten Tips for Staying Out of Legal Trouble 405
Acting Beyond Reproach 405
Screening Applicants Carefully 406
Keeping Abreast of Changing Laws 407
Writing a Solid Rental Contract 407
Complying with Fair-Housing Laws 408
Maintaining Your Property 408
Keeping a Paper Trail 409
Following Legal Eviction Procedures 409
Practicing a Reasonable, Legal Security Deposit Policy 410
Promising Less, Delivering More 410
Chapter 22: Ten Tips for Being a Better Landlord 411
Assessing Your Landlord Readiness 411
Maintaining Rapport with Tenants 412
Establishing Professional Relationships 413
Joining an Association 413
Taking Landlord Training Courses 414
Getting Certified 414
Keeping Abreast of Legal Developments 415
Being Proactive 415
Honing Your Communication Skills 416
Hiring an Expert When Necessary 416
Index 417
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