Landlords

Landlord Liability and Obligations

Landlords could generate good income by renting out their property, and while there are laws that protect this investment, they still have a responsibility towards their tenants. These liabilities and obligations are also in accordance with the law, so compliance is necessary to avoid any legal problems later on.

It goes without saying that the landlord must provide a habitable, decent, and safe place of dwelling that follows the living standards defined in the statutes and common law, as defined per state or city. These laws were based on the Uniform Residential Landlord And Tenant Act (URLTA) created in 1972, Model Residential Landlord-Tenant Code and the Fair Housing Act. Basic facilities like running water, electricity and, gas are a given and the landlords must also provide a secure place that’s well maintained and free from health hazards.

Apart from these, however, a landlord has five main duties that could be categorized into the following obligations:

  1. To manage security deposit or prepaid rent
  2. To disclose the owner
  3. To deliver possession of unit
  4. Subject to limitation of liability
  5. To maintain the unit

5 Primary Obligations of Landlords

1. Obligation to manage security deposit or prepaid rent

Landlords are allowed by law to ask for a security deposit from the tenant to help cover unexpected costs, such as property damage that doesn’t cover the usual wear and tear, or failure to pay the rent, or a breach in the lease agreement.

A security deposit typically covers one month’s rent but it’s not unusual for landlords to ask for an amount that’s good for three months, especially when the tenant is a pet owner. Some states, such as Texas or Illinois, don’t impose any limitations to the maximum-security deposit amount a landlord could collect.

Deposit Protection

Landlords can create a separate bank account for security deposits so it could earn interest; however, compliance to this depends on state laws. Some states require landlords to provide the tenants a receipt from the bank where the deposit is kept following the move-in. Some states might further require landlords to advise the tenant of the interests the deposit accrued annually.

Inventory of the Property

When the lease agreement ends, the landlord must return the deposit to the tenant within 15 to 30 days, provided that the latter complied with the terms of the lease. Hence, the landlord must also do an inventory of the property and its items before it is occupied and before the tenant vacates the place.

If possible, both parties can do the inventory together to properly account for the condition of the rented place.

Security Deposit vs. Prepaid Rent

Landlords may also accept prepaid rent payments. However, the lease agreement should properly identify this as advance payments and not security deposits that will eventually be returned to the tenant.

Prepaid rent, however, bears some disadvantage to the property owner or landlord because any advanced payments can be an accounting issue. Until prepaid funds are applied as rent due, it’s considered a liability in the accounting books.

2. Obligation to disclose the owner

Landlords have the obligation to provide tenants with the complete name and address of the property owners, as well as the details of individuals who have the right to collect rent from tenants, to issue notices, or to manage and maintain the building. These are the same people that the tenants could address their complaints and other matters relating to the rented property. Sometimes, the person tasked to collect the rent isn’t the property owner but a building manager or a letting agent.

The disclosure is in line with most state laws. If no such details were provided in writing, the tenant, by law, can file for a request in a city office. In some states, the name and address of the property owner could be requested from a tax appraisal office.

If the details aren’t written in the lease agreement, it may also be posted at the building manager’s office or in memos and announcements given to tenants.

3. Obligation to deliver possession of unit

Landlords must have the rented property vacant and ready before the tenant’s move-in date, as stated in the lease agreement. The tenant might file a legal case against the landlord for failure to fulfill his or her obligation.

Sometimes, however, there are instances beyond the landlord’s control that might lead to delays in delivering the possession of the unit. Some of them are:

  • The previous tenant has not vacated the rented property completely.
  • There is a squatter in the property.
  • There are delays in the construction or repair of the unit.
  • There are events classified as force majeure.

Regardless of the reason, a well-documented lease agreement should have a provision covering the possibility of a delay.

4. Obligation subject to limitation of liability

The landlord’s liability to the tenants ends when the property is sold and the new owner assumes the obligations in the tenancy agreement. As a final act, the previous landlord has to make the announcement of the new ownership or management in writing.

Previous deposits that tenants have made must be transferred to the new owner or landlord and must also be entered into deposit accounts. Unless otherwise discussed with the tenants, the provisions in the current lease agreement remain. There will be no added rights and responsibilities for the new landlord.

5. Obligation to maintain the unit

It’s the landlord who has the responsibility to take care problems like:

  • There’s no hot water in the cold winter months,
  • The sewer system leaks and there’s a stench in the complex, or
  • A neighbor’s noisy dog is keeping the other tenants up,

Landlords need to ensure the cleanliness and orderliness of the area, as well as maintain the property’s livable conditions. They also have to see to it that the property follows the building codes and safety guidelines, and keep the services in order.

5.1 Responsibility to maintain a safe environment

Locks and bolts

The security of the tenants is priority and landlords have to safeguard this at all times. Doors and windows must have suitable locks or bolts that work, and the tenants must solely have the keys to their unit. As such, landlords have to change the locks when an old tenant leaves and before the new occupant moves in.

Electricity and Gas

All electrical and gas systems must be checked and repaired before occupancy and during the duration of the tenancy. This includes the wirings, light fittings and tubing, switches or sockets, and supplied appliances like a rice cooker, gas stove, furnace, kettle or washing machine. Landlords must keep records of electrical and gas checks done by a competent individual or engineer. Landlords must also ensure that appliances and furniture brought into the unit, whether new or secondhand, meet the safety standards.

Every state has established codes and guidelines for maintenance and upkeep of the property and a specific agency is tasked to enforce these rules.

Common areas

The common areas of a building or complex must have proper lighting. There shouldn’t be any safety and health hazards in the laundry room, parking lots, courtyards, exterior walkways, corridors, stairwells, elevators, and roofs (if accessible to the tenants).

Security during repairs

Landlords must have someone keeping watch over service workers during repairs, especially if they have to go inside a tenant’s place to fix the smoke detectors, for instance. Prior arrangements with the tenants must be done in this case. Lawsuits, complaints and crimes like robbery could arise when landlords fail to secure the property.

Other important disclosures

Based on federal laws, landlords have to advise tenants of the following incidents, particularly before signing a lease:

  • If there’s a registered sex offender in the community,
  • If there were recent deaths in the complex, especially in the rented unit, and
  • If there are molds, lead-based paint, meth contamination and other hazardous elements in the building.

As with other provisions, requirements per state or city differ.

5.2 Responsibility to maintain a quiet environment

Landlords can establish rules covering quiet hours in an apartment community. This could be an added clause in the tenancy agreement and could affect the tenant’s standing if the clause is violated.

For instance, loud music and other noises are prohibited after 10pm, or barking dogs should be contained and trained not to disturb the peace around the property. This is part of the reason why tenants have to be screened before they move in.

During repairs and renovations, however, the landlord could negotiate with other tenants about the potential noise and disturbance. The landlord might consider reducing construction hours or offer a reduced rental fee for the duration of the renovation.

5.3 Responsibility to maintain a clean environment

A dirty and disorganized property is a health and safety hazard and landlords must take care of these problems as part of keeping the property habitable.

Trash must be regularly taken out to ensure that the property is free from rodents and cockroaches. Landlords have the task of calling the city council if the garbage has not yet been collected.

If necessary, the landlords must also hire professionals to get rid of pest problems. Landlords can also assign reliable and trusted service people to clean the common areas, cut the grass in the yard, and water the plants.

State laws might require regular checks for pest infestation, damp and mold inspection, and other inspections for building vulnerabilities and instabilities. Landlords must ascertain that these inspections are carried out on schedule.

5.4 Responsibility to respond to repair requests promptly

Some repairs, such as a broken heating, water or sewer systems, require the landlord’s immediate action, especially if it can result in inconveniences and affect the hygiene, sanitation, and insulation of the tenants. Other fixes, such as broken windows or cabinets, could be arranged with the tenants at their convenient time. It is the tenant’s responsibility to tell the landlord if their unit necessitates repairs.

Landlords who cannot attend to repair requests in a reasonable time frame must see to it to let the tenant know, preferably in writing. Some repair requests may be subjected to rent payment deductions or rent withdrawal, depending on the lease agreement or state laws or city ordinances.

Some states might only provide deductions if some conditions are met, while others might prohibit such practice completely. Common scenarios where rent deductions might be applicable include:

  • Plumbing issues, specifically for unusable toilets
  • Broken heaters during winter season
  • Structural damage in the unit

Landlords, however, may not shoulder all repairs. Sometimes, tenants have to assume the responsibility, especially if pets, family members or houseguests caused the damages.

6. Obligation to advise tenant to procure renter’s Insurance

Tenants need to purchase renters or contents insurance as protection from the following instances:

  • If their possessions were damaged by fire, storm, flooding, and other disasters,
  • If their possessions were stolen, or
  • If a family member, pet, houseguest, or the tenant themselves caused damage to the rented property.

Tenants have to list down specific items in their contents insurance coverage, and if possible, attach the documents in the tenancy agreement with the landlord.

Learn more about the Obligations and Liabilities of Landlords

Whether you are a landlord or a tenant, its best to know your obligations, liabilities, and most especially, your rights under the laws. Read more about real estate tips, updates on laws, and the latest news at Rental Academy.

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