Rental businesses, like other businesses, are regulated by law to prevent abuse, injustice, or unfair business arrangements. Without rental and housing laws, the system will be chaotic: unreasonably high rent, non-paying tenants, poor living standards, etc.

Landlords, property managers, rental agents, and other industry players must familiarize themselves with the law to maintain a good business reputation. Violating laws could also lead to expensive lawsuits that could terminate your business entirely. Ignorance of the law excuses no one, so not being aware can’t save you from liability. Knowledge is your best ally and defense.

There are many housing and rental laws already in place, so it might require a lot of time to study all of them. However, there are a few basic laws that you should never forget. But before we discuss them, note that there are federal and state laws, which means some of them may vary from state to state.

Discrimination Laws

The Fair Housing Act (FHA) is a piece of legislation that aims to prevent discriminatory practices in the rental housing industry. The act prohibits landlords from denying potential clients from renting their property based on color, gender, race, religious belief, family status, national origin, and disability. Some states include factors such as marital status, gender identity, political affiliation, and familial responsibilities.

FHA applies even in advertising your property, setting apartment rules, or screening applicants. For instance, when a rental agent publishes a listing on Padleads, the contents should not be discriminatory. When screening leads and doing background checks, he must not deny an application based on the applicant’s skin color. Agents may syndicate their Padleads listings to popular rental websites where many people can see them, so an agent must be careful when it comes to things that may come off as discriminatory.

Legal Lease Agreement

The lease agreement is one of the most vital documents that every landlord should have. It’s a landlord’s first line of defense when a tenant sues them; it sets the living rules for tenants; it can regulate violations, and; it is a strong basis in dealing with landlord-tenant issues.

A landlord is free to decide what rules, rental arrangements, and other stipulations they want to put on the lease agreement as long as it doesn’t violate the law. For example, most state laws limit security deposits to a maximum of two month’s worth of rent. That means that a lease agreement can’t require a tenant to pay a security deposit equal to more than two month’s rent.

Required Disclosures

Tenants have the right to know everything about the property they are about to rent, both the good and the bad. At a federal level, the law requires landlords to inform tenants about lead-based paint before the beginning of the lease.

Other required disclosures vary from state to state. Some state laws only require only the property owner’s name to be disclosed, while some states require more than 10, such as recent deaths, mold, meth contamination, or other potential hazards to safety and health.

Repair Responsibilities

The lease agreement must outline the responsibilities of the landlord in terms of damages and repairs. Landlords are obliged to conduct repairs in their rental property if the damage was not due to the tenant’s negligence.

Some states allow landlords to require tenants to have renter’s insurance to cover property damage due to the tenant’s negligence.

Security Deposits

Handling security deposits must be in line with the law. As mentioned in an example earlier, the landlord can’t charge an amount more than what is legal. Other than that, some states require security deposits to be deposited in an interest-earning account and the landlord must give the interest to the tenant annually.

The security deposit must also be returned to the tenant within a specific number of days after the end of the lease. The duration varies from state to state. Should there be deductions to the deposit, the landlord must provide an outline of such deductions as well as receipts, together with the unused portion.

Study these basic housing and rental laws, especially the state laws, because violating them can put your business or real estate career in jeopardy. Knowledge is power. Use it to protect yourself and preserve your business.