How creating a solid lease and handling evictions can keep your rentals secure.
Are you confident that your property management practices are legally sound, or are you unknowingly risking hefty fines, legal disputes, and potential loss of your rental investments? Today, I’ll talk about some critical legal issues in property management and how to avoid them.
These four tips can help you stay on the right side of the law and protect your rental investments:
1. Have a great lease. The most important thing you can do as a landlord is to have a solid, legally sound lease. This lease should be written by a qualified attorney or a real estate professional affiliated with a brokerage, such as a property management company or a Realtor, and it should be on a promulgated form. A well-written lease protects you and clearly outlines your and your tenant's responsibilities. Avoid using generic or outdated leases—they can leave you vulnerable to legal problems.
2. Know and follow your lease. Once you have an outstanding lease, know it inside and out. You need to understand the terms to ensure you’re not breaking the lease—and to hold your tenants accountable if they do. As a landlord, you mustn’t break your lease terms. Doing so can leave you legally liable. Always follow the lease, understand its terms, and make sure you can enforce them. This is one of the easiest ways to protect yourself from legal headaches.
"Know your lease inside and out to avoid bigger problems down the road."
3. Require a security deposit. Collecting a security deposit is another essential practice. Typically, this deposit is equal to one or two months’ rent. A security deposit gives you financial leverage if the tenant damages the property or leaves it in a mess when they move out. Always ensure the security deposit terms are clearly stated in your lease. This protects you and sets clear expectations for your tenants.
4. Stay on top of evictions. Evictions are never fun, but sometimes they are necessary. If a tenant breaks their lease—most commonly by failing to pay rent—you must act quickly. It's much easier for a tenant to catch up on $500 in missed rent than $5,000. If you wait too long, the debt can pile up, making it almost impossible for the tenant to recover. Address issues as soon as they arise to prevent them from escalating. If eviction becomes necessary, contact a professional, such as a real estate attorney or a property management company.
Managing the legal complexities of property management doesn’t have to be overwhelming. You can confidently protect your investments and ensure smooth operations with proper guidance. My team is here to help.
Whether you prefer to handle things in-house with our support or need a referral to a trusted expert, taking the proper steps now will help you avoid potential pitfalls and set you up for long-term success. Call me at (210) 264-3259 to address any questions on how to keep your property management legally secure.