As a first time landlord, you want to make sure that everything you do is correct. Not only do you want to protect your property and investment, you also want to make sure you are fulfilling your duties and remaining legal in the process. The following are a few legal pitfalls to avoid when you are new to the landlording business.
Pitfall #1: Generic lease
It's relatively simple to go online and download a generic lease form, but this can be a mistake. Even if the form is made for your state, it may not be as comprehensive as you need to protect yourself. It's a much better idea to have a specific lease drawn up for your property. If you hire a property manager, they will have specific lease forms that they use. If you choose to manage your own property, you will have the added expense of a lawyer consultation. This is because it is vital to make sure that you are covered legally and that no part of the lease provides any loopholes or is at odds with local tenant laws.
Pitfall #2: Skipping background checks
Although most new landlords know they need to carefully vet possible tenants, it's still a step that is often not completed thoroughly enough. Although background checks take money and time, they are much more inexpensive than trying to evict a problem tenant later. You should perform a criminal background check, a credit check, and employment verification at a bare minimum. Checking with past landlords may also be a good idea.
Pitfall #3: Overlooking upkeep terms
Tenants don't care about your property as much as you do. This means they may let the grass die instead of paying the extra water bill, they may allow weeds to overcome flower beds, or they may ignore a cracked driveway until the problem has grown to epic proportions. If you don't have property upkeep terms clearly laid out in the lease, you will have no recourse if these issues occur. It's also important to make sure the terms are within the legal bounds allowed.
Pitfall #4: Skipping maintenance
As a landlord you are responsible for most parts of property maintenance. Most state's have laws that dictate how much time you have to address major issues, such as plumbing problems or a broken furnace. Opting to do maintenance yourself may seem like a way to save money, but if you take too long or fail to fix an issue, you may find yourself in a legal mess.
For new landlords, hiring a property manager can help them avoid these common pitfalls. They can draw up leases, check tenant backgrounds and viability, handle property upkeep issues, and tend to maintenance calls. Contact a management company to learn more.