Landlords: 6 Ways to Minimize Your Chances of a Lawsuit

(The following is an excerpt from the new book from BiggerPockets, The Book on Managing Rental Properties. If you are looking to earn more and have less stress with your rentals, pick up a copy today!)

In our litigious age, it’s impossible to keep yourself 100 percent free from a lawsuit.

As a landlord, the chance of getting sued actually increases. However, there are some actions you can take to decrease your chance of being hit with a lawsuit.

This post is not designed to scare you, but lawsuits are a real thing, hence the need for great insurance on your property. But besides insurance, let’s talk about six of the easiest ways to keep yourself free from lawsuits ever happening.

(Hey – you – before we get to the post, I wanted to invite you to this week’s webinar! This week we’ll be talking about one of my favorite topics: multifamily properties, and how you can use them to make $1,000,000 over the next decade! I hope to see you there! Click here to register now! Okay… back to the post!)

1. Provide Housing That is Habitable

As a landlord, it is your legal responsibility to provide housing that meets a certain level of cleanliness. If you rent properties that don’t meet basic standards, your risk of getting sued increases greatly. So don’t be a slumlord! Fix up your properties and make sure they are in good, livable condition for the tenant. Be sure to investigate and comply with federal, state, and local housing codes to ensure your property is in good enough condition to rent.

2. Provide Housing That is Reasonably Safe

If you fail to provide a reasonable level of security for your tenants, you could be sued. For example, if a tenant calls with complaints about their door lock not working, and before you can fix the problem someone breaks in and attacks the tenant, you could face a lawsuit. Therefore, make sure safety-related concerns are addressed promptly. And, of course, don’t rent to people who might hurt other people.

3. Get Repairs Taken Care of Quickly

If a tenant has an issue that must be fixed and you refuse to, you are opening yourself up to a lawsuit or at minimum the tenant legally being able to withhold the rent or using their own money to pay for the repairs. So don’t let things get to this point. Hire qualified people to repair your properties immediately.

4. Maintain the Property Well

One of the primary causes of lawsuits in the real estate space is due to injury sustained on the property by a tenant or a guest. Therefore, it is imperative that you continually make sure there are no hazards on the property that could harm a tenant, such as defective or missing handrails, slippery staircases, or dangerous pets.

5. Disclose and Handle Environmental Concerns

Landlords can also be sued over environmental concerns, such as asbestos, lead-based paint, mold, bedbugs, or other local environmental issues. The key to avoiding lawsuits is disclosure and fast action. If you know of a problem, disclose it. For example, if you know asbestos or lead-based paint was used in the property, let the tenants know. If mold, bedbugs, or other similar issues creep up, deal with them swiftly.

6. Follow the Lease

When you sign a lease with a tenant, you are signing a contract that is binding for BOTH parties. In other words, you have some duties and responsibilities as well, and if you break your end of the contract, you could get sued. Therefore, understand the lease that you are signing and stick to the contract.

—-

No one becomes a landlord to get sued, but by putting on the landlord hat, you open yourself up to the possibility in a greater way than the rest of the population. However, by following the tips outlined in this post, you’ll hopefully avoid the stress and financial heartache that can come from a lawsuit.

Are there any other tips you could add to help others avoid lawsuits?

Leave your best suggestions below!

Note By BiggerPockets: These are opinions written by the author and do not necessarily represent the opinions of BiggerPockets.