Property Managers: 6 Signs You Might Be Breaking the Law

Last modified on July 13th, 2017

woman legalCertainly, local laws that govern residential rentals vary greatly across the country. However, there are certain actions that some landlords think are fine but actually break the law in many American cities and towns. Complying with these laws helps protect all parties involved in a rental transaction so it’s wise to consult a legal professional, and brush up on a well-respected ethical code for property managers.

6 Property Manager Actions That Could Break the Law

To protect property managers, and renters, consider these common activities that could be illegal:

  1. Dropping in: Tenants have the right to enjoy their privacy. If property managers need to stop by for routine inspections, maintenance, or repairs, they must usually offer notice. As stated in the landlord-tenant law, a property manager must seek a tenant’s consent to enter because they’ve surrendered possession of the premises over to the renter upon signing the rental agreement. If a tenant happens to be home, they may waive their right to get advance notice, but property managers should not just use their keys to stop by at any time and without prior warning.
  2. Asking certain personal information during an application: Certainly, landlords can qualify tenants based upon their income, credit history, and job status. At the same time, property managers aren’t allowed to ask about personal matters. For instance, It’s not legal to fish for information about religion or place of origin, even in personal conversations. Focus on asking questions that reflect the applicant’s ability to afford the property and uphold lease terms.
  3. Increasing the rent in the middle of the lease: Property managers reserve the right to increase the rent with a new lease or renewal. At the same time, they may not increase rent in the middle of the lease term. If both parties agree, it might be possible to modify the lease because of some property improvement or additional services.
  4. Evicting renters because of a sale: Property owners usually reserve the right to sell a property whenever they choose. However, this sales transaction can’t violate the tenant’s lease. Sellers have to make the sure the new owners will keep tenants in place until their lease ends or find someway to buy the tenants out of their lease.
  5. Not providing a Certificate of Occupancy: Certain types of rental units might not prompt tenants to ask to see a CO. For instance, few renters of established apartment complexes probably bother to ask. On the other hand, renters might want to make sure that a garage apartment or basement room will provide them with a home that will provide them with a legal, safe, and comfortable dwelling. Both property managers and tenants can protect themselves by making sure that the unit has been maintained up to the standards of local codes.
  6. Charging too much for a rental deposit: Some states don’t allow landlords to charge more than the price of rent for one month; however, some states have different limits or no limits at all. It’s possible to argue that these rules might protect tenants, but it’s also possible to argue that limits may keep property managers from giving potential renters with poor credit a chance. In any case, property managers need to be careful that they comply with local rules.

It’s important to recognize that your property management practices are a crucial element of your business. Not only does compliance protect renters, it also protects managers and owners against expensive penalties, potential liability, and a bad reputation. All parties involved in a rental agreement should learn about local laws and pay attention to red flags. It’ll benefit your business as much as it does yourself.