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10 Tips for Dealing With Legal Issues in Your Rental Property

10 Tips for Dealing With Legal Issues in Your Rental Property

On the surface, managing a rental property seems straightforward. You have an empty property. A tenant needs to rent that property. You mutually agree on a price, split certain responsibilities, and go forward in a mutually beneficial arrangement that should last many years.

Unfortunately, there are sometimes complications and points of confusion that cause legal issues to arise. As a landlord or property owner, you’ll need to be prepared to deal with these legal issues.

How do you prepare appropriately?

The Legal Pitfalls of Rental Property Management

There are a variety of legal issues a landlord and/or property owner can face when managing rental properties. A tenant could sue you for failing to make necessary repairs. They could fight back against a legitimate eviction because it wasn’t processed correctly. They could attempt to continue living in the property beyond the expiration of their lease. They can even pick fights with you over small details in lease agreements and other documents.

Many of these issues will disappear as quickly as they arise, especially if they originate with a disgruntled tenant who doesn’t understand the law. Still, some of these issues can be complicated, expensive, and downright painful to deal with, so it’s a good idea to work proactively to guard against them.

How to Deal With Legal Issues in Your Rental Property

These are the best strategies for dealing with legal issues in your rental property.

  1. Invest in liability and umbrella insurance.Check your insurance policy now and consider upgrading your liability insurance and/or purchasing umbrella coverage. These types of insurance policies provide you with protection in the event of a legal issue, potentially paying out for legal services as well as any penalties you may face. It’s an easy way to protect your assets in the event of significant legal action against you.
  2. Keep your actions separate from your emotions. Do your best to keep your actions separate from your emotions. You may feel angry, nervous, or anxious about legal issues once you become aware of them, but it’s important to act as logically and clear-mindedly as possible. Avoid making impulsive decisions or lashing out inappropriately.
  3. Do your research in advance.Real estate laws can be complicated, but it’s still a good idea to do at least some research in advance. You should be deeply familiar with landlord and tenant laws in your area, so you’re adequately prepared for potential issues you could face in the future. This will also help you avoid many potential legal issues.
  4. Make your lease agreements ironclad. Your lease agreement is arguably the most important legal document in your strategy. It’s the document that outlines the nature of your arrangement, the responsibilities of each party, and the expectations for both parties moving forward. If it has any holes or weaknesses, it will be exploited by any competent lawyer, so make sure the document is as solid as it can be. Also, leave no room for ambiguity; your lease agreement needs to be as specific as possible.
  5. Hire a good lawyer and talk to them often. In the course of your property management, hire and regularly talk to a good real estate lawyer. They can help bring your awareness to the most pressing legal issues you may face and guide you to avoid significant risks. They can also provide you with meaningful advice if and when you face legal action from a tenant.
  6. Consider hiring a property management company.Some property owners go a step beyond and hire a property management company to handle matters on their behalf. This functions as a kind of liability shield, delegating certain responsibilities and introducing an intermediary to the landlord-tenant relationship. Your property management company can work proactively with your tenant to avoid legal issues and work together with you and your lawyers to find solutions for issues that do arise.
  7. Document everything. It’s also a defensive measure to document anything and everything related to your property. If you have a hard record of every letter you’ve sent, every email you’ve sent, every payment you’ve collected, and every repair you’ve made, it’s going to be tough for your tenant to make any baseless accusations.
  8. Stay organized.Furthermore, it’s important to stay organized. You need to be able to find the right documents if and when you need them, or else it will be like you never had them to begin with. Many software platforms can help you with this.
  9. Follow the law precisely. Don’t cut corners and don’t skirt the law. If you follow all laws, regulations, and legal procedures carefully, you shouldn’t have to worry about any meaningful legal action against you.
  10. <Accumulate an extra emergency fund. Hopefully, you already have an emergency fund for your property management strategy in place. It may also be useful to save a secondary emergency fund specifically to help you shoulder the costs of legal representation if and when you need it.

Some of these strategies can be useful to you once a legal issue arises, but most of them are beneficial if you begin working on them long before any legal issues arise. Work proactively and properly defend yourself if you want to minimize your risks and liabilities.


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