The Basics About Liability when Renting to Tenants

Property Manager with personal

Recently I got my first house rented out. I learned a lot about liability. I am not a lawyer, but here's what I learned.

It might have been your prior residence, or maybe you bought it for investment purposes, but in any case, certain important duties arise with that house that you want to rent out. First and foremost is what's known as an implied warranty of habitability. It doesn't matter if you have a written lease, or your renting the house on a month to month basis. You're required to provide a house that is livable, clean and safe for whoever rents it. Hot water and heat are fundamental. Infestation by rodents, other pests or insects is not permissible. Roof leaks and broken windows are part of the warranty of habitability too. They're the landlord's responsibility to repair.

Safety Code Compliance
Every county and municipality in the United States has a written safety code containing ordinances that must be complied with. Different states, counties and cities have different codes and provisions. If the house was built before 1978, familiarize yourself with applicable lead paint laws. You'll also want to provide your new tenant with a copy of those laws. You'll want a signed receipt for it. Appropriate language in a written lease will be sufficient. Here are some other possible issues that local laws might call on you to address:
  • Mold: If mold is found in the home, the landlord might be required to remediate the problem.
  • Occupancy Limits: Ordinances might not allow 18 people to live in a 1,200 square foot home. Know whether there are occupancy limits relative to the size of the house.
  • Basement Bedrooms: Most safety codes prohibit bedrooms in basements. It's a fire safety issue.
  • Smoke Detectors: Your local ordinance will specifically state how many smoke detectors will be required in the home and where they're required. Hard wired detectors are preferred over detectors that require batteries.
  • Carbon Monoxide Detectors: These may or may not be required, depending on where the rental unit is located. If there isn't a carbon monoxide detector in the house, a reasonably prudent landlord might want one in operation anyway.
  • Miscellaneous Maintenance: As a landlord, you have a duty to keep the premises in safe repair. Any safety issues that are brought to your attention should be repaired on a timely basis and not sometime next week.
  • Lawn Care and Snow Removal: Every municipality addresses these concerns in its ordinances. Know your responsibilities and fulfill them.
  • Landlord Insurance: Ordinary homeowners insurance won't cover you on many types of rental property claims. See your insurance agent. He or she can make sure that you're properly covered. You might even want to consider umbrella insurance for any large claims.
  • Security Deposits: Every state has its own laws on how security deposits are to be handled. Know your state's security deposit law. Many states provide for punitive damages, court costs and attorney's fees on any part of a security deposit that is unlawfully withheld.
  • Exculpatory Clauses: These lease provisions operate to absolve the landlord of any liability if a tenant is injured on the rental premises. They're generally unenforceable.
Injuries to Third Parties
Although you might not be in possession of your rental property, you are a person who is in control of it, so you can be held liable for damages to a visitor who is injured on the property. The pizza delivery kid might fall because of a loose step, or the mailman might trip and fall on uneven sidewalk slabs. A visitor might even fall inside of the premises on crumpled carpeting. Dangerous conditions that you knew or should have known about but failed to repair can be used against you - that's called premises liability. That's another reason why appropriate landlord insurance is so strongly recommended.

Learn all that you can about being a landlord. After all, it's a business, and you want to earn money while your property appreciates!

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