The reality right now in real estate is that there aren’t enough homes to buy. Properties are running low, and not many are being made because of the pandemic. This has been a problem for quite some time. This is why many property owners have resorted to leasing their property to give more space to people who need it. Becoming a landlord is a tough job. One that requires you to know much information regarding real estate and its laws. Here are some essential laws you need to know before leasing your property and becoming and a landlord.
Getting Professional Help
A disclaimer: these laws exist in all states in the US. However, some states have some additional policies. An estate lawyer can guide you regarding the necessary laws unique to your state. Some laws might also be specified within your general vicinity. This is known as the Landlord-Tenant Laws, and you’re going to need a lawyer to interpret those. They can also hold a seminar for your tenants regarding the necessary laws they need to know as lessee of your property. Furthermore, they can settle problems you might have with some of your tenants.
The Fair Housing Act
The most important law you should know as a landlord is the fair housing act. This act which was written in 1968, was made to stop anyone in the real estate market from discriminating against clients based on their race, skin color, gender, nationality, and religion. It’s also been amended to include those who are disabled and divorced. So this means that every client has an equal chance in renting, purchasing, or financing a residential property.
As a landlord, you can’t choose your clients. You have to give everyone a fair chance to your property and a fair price. This means that you can’t give discounts to friends or extended family members. You can’t also lie to someone that the property is unavailable just to stall it for your friend. These are unethical and unlawful. Anyone who inquires regarding the property must get the same information as the rest. Everyone must have the same price that you have placed upon the property.
Fair Credit Reporting Act
This particular act is mainly done for those trying to profit from real estate properties. It gives you the chance to do a background check on your potential clients and see whether if they have a good credit score or not. The worse nightmare that a landlord would have is a lessee that won’t pay. This is because you can’t kick them out as the way movies do. There is a legal way to do it, and it tends to be a hassle for many landlords. This act prevents that from happening.
Any client interested in renting your property must undergo a background check. As a landlord, you must inform them of this, as it is their right to know. If you notice that they pay late or generally have a low credit score, you have the right to reject them based on the information you are given.
Now, some landlords might be talked into by someone who has a bad credit score to let them rent in your property because of the fair housing act. However, the fair housing act only states that you cannot reject clients because of their race, skin color, gender, nationality, religion, disability, and marital status. If you reject them because of their bad credit score, then you’re not breaking that law. If they threaten you with legal action, make sure that you give them a formal letter of rejection alongside the necessary information of the reporting agency you’ve hired.
The Lead Disclosure Rule
This might not apply to your property if it’s built right after the 1980s, but if you have an older property, you must tell your potential clients that some parts of the property are made of lead and may be toxic to individuals. The best way to not break this law is to refurbish your property. Hire a contractor and tell them that you’ve bought an old property and you want it up-to-date. Many contractors are willing to do this for you for a fair price.
Here are three of the most important laws you should know as a landlord. Potential clients will bring up these laws a lot, so make sure you know these laws by heart. Additionally, many new policies are from these laws, so make sure that you read up on any amendments that might have happened throughout the years.
