I’ve been a landlord for almost 10 years now (wow, time flies) and last Thursday I got my first call from a lawyer. While this is not good news, I would like to squeeze this lemon and make a little lemonade it is the season for Joy and Holiday Cheer after all. For starters, I didn’t do anything purposefully or accidentally wrong, huge sigh of relief! So you may be wondering how then have I gotten myself into this predicament? I’ll give you a quick rundown of this particular scenario (The lemon) and then I’ll share with you the checklist I use to keep myself from being in front of a judge, so far (The lemonade).
A current tenant of mine has applied for, and been approved for, Section 8 housing or HUD. That’s great you may be thinking, guaranteed rent for at least a year. The catch here is that HUD approved her for an amount that is less than what she is currently paying for rent. HUD rules are strange in that when valuing a house that someone currently resides in. They take the current rent amount minus expected utilities (which are actually in part, paid by me) to come up with a rate they would approve. With HUD it is illegal for tenants to pay the difference in rent to a landlord because what HUD is supposed to be providing is fair market rent. To add-on to the matter, the tenant has lived at the property for over two years with no rent increases and is renting the property for at least $100/month under the current fair market rental rate. In the end I had to deny the application for HUD because it just didn’t make good business sense for me. This last Thursday I got a call from The Oregon Law Center, which provides free legal services to low-income individuals to assure fairness when it comes to critical needs like food, shelter, medical care, income, and physical safety. I was left me a message stating that I needed to return his call immediately in regards to my duplex and that it was a very serious matter. I of course called him as soon as possible to determine what the issue may be. He told me that my current tenant came to him and brought to his attention that I was denying her HUD application which is now illegal in the state of Oregon. For more details on that see my blog Is Denying a rental applicant on HUD discrimination. I explained the situation to him and he was very persistent that they are starting to strictly enforce the issue in January and that if they found that there was more to the story then what I was telling him that they would open a case and investigate my rental practices more carefully.
As a landlord we don’t ever want to get that call from a lawyer saying there’s an issue, it’s a bit of a shock and is sure to make anyone’s stomach tie up in knots. Being in a court battle is an expensive and stressful experience that I would rather keep a healthy distance from. Below I’ve outlined the process I use to keep myself in the clear legally.
- Document Everything!
It all starts with a thorough move-in inspection. Document the current condition with photos and in writing.
Use a “bullet proof” lease, make sure your lease is written legally and concisely. You don’t want to have something the you can’t legally require in your lease nor do you want anything in there that is open for interpretation. Make sure that it is clear what the timelines are for giving notice both on the tenant and landlord side of things. A lease is a legal document so don’t forget to have the tenants sign and date the lease.
As maintenance requests come in document the date, type of request, the action taken, and date the request was taken care of. This not only proves that you took the right steps to remedy the issue it can also show you if there is a recurring problem. For instance, if a heat pump fails 4 times this last year, it could be a good time to replace it.
Document all correspondence with the tenant that is more than just pleasantries. If there are issues brought up with your property, neighbors, etc. keep a written record.
- Know the law
The state and federal rental laws are ever-changing and vary from state to state. As a landlord it is part of your responsibility to know the landlord tenant laws for your particular area or areas where you own rental property. You need to stay tuned to; obligations and rights as landlords/tenants, security deposits, eviction laws and on and on. Using rental property software that can provide you with solid legal documents and an efficient way to produce documentation can save so much time and headaches. If you do ever get that dreaded phone call you are well prepared to quickly defuse the situation by showing documentation that you followed all the correct procedures, you have complete, and concise records of all the important data on your property and your tenants.
I hope you all are having a joyous holiday season and please do add in any other ways to safeguard against lawsuits we all need as much support and advice on this topic as possible.