The Function of Landlords

Landlords often have a negative reputation. To frustrated tenants, the landlord is simply the person who demands rent each month, takes ages to fix simple issues like a dripping faucet, and hasn't repainted the building's exterior in decades. However, the reality is that being a landlord can be challenging and underappreciated. Perhaps that's why many now prefer the title of 'residential rental owners' to shed the outdated image of the profession.

In earlier times, landlords were literally considered lords. During the feudal and manorial systems in medieval Europe, land ownership was exclusive to a lord, who allowed peasants to live on his land in exchange for their labor. In return for their work, peasants were offered protection from roving bands of marauders and invading forces. While peasants were not outright slaves, their labor was often exploited through financial and physical coercion by the lords.

In modern times, landlords are property owners who lease homes, apartments, and condominiums as a business venture. The relationship between a landlord and a tenant is governed by strict state and federal regulations to safeguard both parties' rights. Some landlords hire property managers to handle tasks such as tenant screening, repairs, and overseeing the daily operations of rental properties.

Fair landlords and their representatives treat tenants with dignity, charge a reasonable rent, maintain properties according to regulations, and promptly address repair issues. Continue reading to discover how landlords locate and screen potential tenants, what is included in a lease or rental agreement, landlord rights and duties, and what the eviction process entails.

Locating Tenants

One common way landlords attract tenants is by placing rental ads in local newspapers or on websites such as Craigslist.org and Apartments.com. These ads should offer a thorough description of the property, including its size, monthly rent, number of bedrooms and bathrooms, and what appliances and utilities are included. If the landlord prefers a year-long lease instead of a month-to-month arrangement, this should be specified.

By including all these details in the advertisement, both the landlord and the prospective tenant avoid wasting time discussing or touring a property that doesn't meet the tenant's needs. It is also advisable for landlords to speak with potential tenants on the phone before scheduling a property viewing. This additional step ensures the unit is a suitable match for the tenant.

When preparing to show an apartment, the landlord should bring along a completed rental application. This form acts as written evidence that the tenant can afford the rent and has a reliable financial background. It also ensures that the applicant has a positive rental history, free of evictions, legal conflicts with landlords, or missed payments. Below are some common details that should be gathered on a rental application:

The process of meeting with prospective tenants and gathering their applications is a critical part of tenant screening. It's vital for landlords to be knowledgeable about relevant fair housing laws to avoid any legal issues or accusations of discrimination during this phase.

A key principle in tenant screening is to set clear criteria that all applicants must meet. For example, applicants should have a minimum monthly income, a specified credit score, and no previous evictions. It’s wise to document these criteria and have a legal expert review them. Decisions should always be made based on these objective standards, not personal biases. To ensure fairness and prevent discrimination, landlords should apply the same rules to every applicant without making exceptions for some but not others.

Once the right applicant is identified, the next step is to finalize the process by signing the lease agreement.

The Fine Print: Rental Agreements and Leases

Rental agreements and leases are legal contracts that clearly define the terms between the landlord and tenant. The distinction lies in their duration: rental agreements typically apply to short-term or month-to-month rentals, whereas leases are generally for six months or a year [source: Move.com]. While rental agreements renew automatically every 30 days, leases require formal renewal when they expire.

In England, two primary types of rental agreements exist: shorthold tenancies and assured tenancies. Shorthold tenancies, the standard form, allow the landlord to regain the property after six months with two months' written notice. Assured tenancies, however, restrict the landlord to repossession only if they can demonstrate to a court that the tenant is behind on rent or violating rental conditions [source: Communities and Local Government]. In Brazil, the typical rental agreement spans 30 months [source: Global Property Guide].

A rental agreement or lease should specify the following terms:

A rental agreement or lease serves as a legal safeguard for both landlords and tenants. The terms outlined in the agreement provide protection for the landlord against negligent tenants and ensure that the tenant is shielded from unjust or illegal actions by the landlord.

Landlords and tenants must carefully examine the lease's wording, particularly regarding the security deposit and its intended use. A security deposit is an amount that the tenant temporarily provides to the landlord as protection for any damages or repairs beyond normal wear and tear, which we'll define shortly [source: California DCA]. Security deposit disputes are the most frequent cause of legal conflicts between landlords and tenants.

There are several key distinctions to understand. The deposit is lent — not paid — to the landlord. Some states mandate that landlords keep security deposits in a separate bank account, such as an escrow account [source: Nolo]. When the lease ends, the deposit will be returned to the tenant (with interest in some cases) unless the tenant has caused damage to the property beyond normal wear and tear.

What constitutes normal use? This should be explicitly stated in the lease. For example, it's normal for carpets to become dirty, paint to chip, or drains to get clogged. However, if a tenant unlawfully uses their apartment to run a bakery, causing heat damage to the kitchen tiles and peeling the ceiling paint, that goes beyond normal use. In such cases, the landlord may deduct the cost of repairs from the tenant's security deposit.

The best way for landlords and tenants to prevent disputes over security deposits is by taking numerous photos of the property before the tenant moves in. Both the landlord and tenant should carefully document any existing damage and sign a waiver or disclosure confirming that the current tenant will not be responsible for these issues. In Australia, it's common practice for landlords and tenants to complete an official Property Condition Report before signing the lease [source: Tenants Advice Service].

Even after the lease is signed, a landlord should not give the tenant the keys until the security deposit and the first month's rent have been cleared. If a landlord allows the tenant to move in right away, but the checks later fail, eviction may be the only viable option.

As the saying goes, 'An ounce of prevention is worth a pound of cure.' Now, let's examine the most essential responsibilities that a landlord has toward their tenants.

Landlord Responsibility

It is the landlord's duty to provide tenants with a safe, well-maintained living space. Before a tenant moves in, the landlord must ensure that the property complies with both local and federal housing codes. Housing authorities at the city and county level set minimum requirements for electrical systems, plumbing, lead-free paint, lighting, ventilation, and structural integrity. In many areas, landlords are also required to install safety features, such as dead bolts on exterior doors, smoke alarms, and fire extinguishers in every unit.

Once a tenant is living in the property, the landlord is responsible for fixing anything that breaks, whether it's a burned-out light bulb in a stairwell or a leaking faucet. The landlord is expected to respond to repair requests within 24 hours and complete the repairs within a reasonable period. The urgency of the issue typically determines the speed of the fix, according to Nolo.

If a landlord neglects to address a known problem in a timely manner, it can lead to serious consequences. The worst-case scenario would be a tenant or guest sustaining a serious injury due to an unresolved issue, such as a broken railing on a staircase or a missing floorboard. If the tenant can show that the landlord was aware of the issue and failed to act quickly, they may have grounds to sue and will likely win. This is why it is crucial for landlords to purchase liability insurance.

Not all disputes between landlords and tenants end in lawsuits. However, if a tenant becomes frustrated by how long it takes for a landlord to fix an issue like a broken dishwasher, there are several options available. In many U.S. states, tenants are legally allowed to withhold rent until the repair is made. They may also have the right to arrange the repair themselves and deduct the cost from their next rent payment. In some states, if the situation worsens, the tenant can treat the landlord’s failure to act as a breach of contract and move out during the lease term.

A landlord can safeguard himself by meticulously recording when he receives notifications regarding any issues with the property and the actions taken to address them. Even if immediate repairs aren’t possible, the landlord must communicate the reasons for the delay and provide an estimated resolution timeline. A proactive landlord encourages tenants to report problems promptly to reduce potential liability for injuries.

The landlord also holds the responsibility of protecting tenants from crime. All stairwells and shared spaces should be adequately illuminated. Main entrances and gates must remain locked at all times. If there's an intercom system for guest access, it must be functional. Exterior doors should be secured with deadbolts, and windows, especially those accessible by an external fire escape, must be locked.

A landlord must also take reasonable precautions to ensure that his tenants aren't engaged in criminal activities. For instance, if a landlord is aware that tenants are selling drugs from their units and fails to report it to the authorities, the landlord may be held responsible for any neighborhood crimes that can be traced back to the drug operations.

Alongside their numerous duties, landlords are entitled to certain rights under the law. We’ll explore these rights in greater detail in the next section.

Landlord Rights

The most fundamental right of a landlord, as outlined in the rental or lease agreement, is the collection of rent. Rent may be due on a monthly, bi-monthly, or weekly basis, depending on the agreement. The landlord and tenant will agree on the payment method and schedule. While some landlords accept only checks or money orders, others may use bank transfers or online payment systems. If the tenant fails to pay rent on time, the landlord is within their rights to pursue actions that could lead to eviction.

In most U.S. states, and for most property types, landlords are entitled to increase the rent once the lease term has expired. If a tenant has a six-month lease, the rent is fixed for that duration. However, upon expiration, the landlord can raise the rent. Certain older buildings in cities like New York, Chicago, and San Francisco are rent-controlled or rent-stabilized, where landlords are legally prohibited from charging more than a designated amount. This regulation aims to ensure that affordable housing remains available in major urban areas.

Landlords also have the right to access the rental property, but only under specific circumstances outlined in the rental agreement. For instance, if a landlord needs to perform general repairs, they must usually provide at least 24 hours' notice. In emergencies such as a flood, fire, or significant storm damage, the landlord is permitted to enter the property without prior notice. Additionally, landlords have the right to enter the unit if a tenant's rent is overdue and they are not responding to written requests.

During the tenant screening process, landlords must comply with stringent anti-discrimination laws, which only apply to individuals. However, landlords have the right to prohibit pets from the property and can even specify which breeds or types of animals are not allowed on the premises.

If a tenant fails to fulfill their obligations under the lease or rental agreement, the landlord has the right to begin eviction proceedings. We will explore the eviction process further in the next section.

Evictions

Evictions must follow a strict legal procedure. If a tenant is behind on rent or repeatedly violates the established rules, the landlord has the right to start the formal eviction process. However, landlords cannot take matters into their own hands. It's illegal in nearly all 50 U.S. states for landlords to lock out tenants. A lockout involves actions like changing the locks, blocking access to the rental unit, cutting off utilities, or using any other means that prevent the tenant from using the property as intended [source: Metropolitan Tenants Organization].

The good news for landlords in the U.S. is that the eviction process is one of the fastest legal proceedings. In Texas, for example, it's possible to evict a tenant in as little as nine days, and landlords can even temporarily lock out tenants who repeatedly fail to pay rent [source: Austin Tenant's Council]. Even in California, known for its strong tenant rights, the average time for a judge to hear and rule on an eviction case is just 20 days [source: California Department of Consumer Affairs].

In most states, eviction starts with a formal notice from the landlord, providing the tenant with clear options. The tenant must pay rent by a specific date, resolve any issues with the code of conduct, or vacate the property. If the tenant fails to comply, the landlord can pursue a lawsuit called an unlawful detainer—the legal term for eviction.

In an unlawful detainer case, both the landlord and the tenant are allowed to present their arguments. The judge decides, based on the testimonies and evidence, whether the tenant has violated the lease. If the landlord wins, the tenant may be required to vacate the property and pay any outstanding rent, as well as the landlord’s legal fees. If the tenant wins, the landlord may have to cover the tenant’s legal expenses.

If the landlord prevails, they receive a writ of possession, which specifies the number of days the tenant has to leave the rental property and remove all their belongings. If the tenant fails to vacate by the given date, the landlord cannot physically remove the tenant or their belongings. In most states, this responsibility falls to a local sheriff or marshal. Additionally, many states have strict protocols regarding the storage and disposal of any personal property left behind by the evicted tenant.

In the next section, we will explore some professional property management strategies that can help landlords avoid the typical challenges and frustrations of managing a property.

Property Managers

Not every landlord is cut out to be a property manager. It’s a demanding job that often involves long hours, unexpected phone calls, and dealing with frustrated tenants. For landlords who prefer not to handle the day-to-day tasks themselves, professional property management companies offer services like drafting vacancy advertisements, screening potential tenants, preparing leases, collecting rent, managing regular maintenance, organizing repairs, and even answering emergency calls in the middle of the night when something like a toilet gets clogged. Property managers typically charge around 10% of the monthly rent.

Landlords should be very selective when choosing property managers. Experience plays a crucial role. The main reason for hiring a property manager is to lighten the daily responsibilities of the landlord. A capable manager will handle things independently and only consult the landlord for significant repairs or potential legal matters. Strong communication skills are a must. Ideally, the manager will act as an intermediary between the landlord and tenants, clearly communicating both sides' needs.

A smart landlord will thoroughly vet all potential employees, including property managers, to ensure they have sound moral and ethical values. This is especially important because if the property manager commits a crime against a tenant, the landlord may be held accountable. It's crucial for the landlord to confirm that all employees at the property management company are covered by liability insurance. If not, the landlord should extend coverage to their property managers through their own liability policy.

Being a landlord is akin to running a business. Many landlords rely on rental management software to monitor their income and expenses. Programs like Quicken Rental Property Manager 2009 help landlords stay organized by tracking bills, documenting expenses, maximizing tax deductions, and separating business finances from personal ones. Larger companies might turn to web-based systems such as Property Boss, which provides features like work order tracking, online tenant screening, tax compliance, and financial reporting.

To be a successful landlord and avoid legal complications, minimizing risks is key [source: Leshnower]. A responsible landlord ensures they have proper insurance and pay their taxes. They make sure their property meets or exceeds local and state building codes and actively look for and address environmental hazards like lead paint or asbestos, which could pose health risks to tenants. They thoroughly vet tenants and employees to prevent criminal behavior. Above all, they treat all tenants with professionalism and respect, avoiding discrimination.

Many cities in the U.S. now offer training programs to help landlords navigate legal challenges and changing regulations related to property ownership and management. These programs also focus on improving landlord-tenant relationships, maintaining properties, utilizing authorities to address criminal activity in rental units, and increasing property values.

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