How Do You Minimise Risk to Property?
No rental property investor wants to hear about a possible or definite lawsuit to defend. Although there are situations where you cannot avoid legal actions, most of the time, property owners can by being proactive. Here are seven positive steps to follow to reduce your risk.
Never ignore necessary repairs. Habitability is at the heart of landlord/tenant law. Failure to provide a tenant with a safe and clean environment is NOT an option. Repairs are necessary for all rental property; handling them quickly and effectively is the best and often the least expensive approach.
Never ignore Fair Housing laws. A definite pathway to a costly lawsuit is to discriminate. There are many Fair Housing laws and many ways to break them. Some may not even be obvious. This concerns just about every area of renting – advertising, showing, tenant selection, handicap tenancy, maintenance, etc.
Never retaliate against your tenants. You may feel you have the most irritating and frustrating tenants on the planet, but retaliation is not the way to handle any situation. Identifying the heart of the problems and settling issues without giving a tenant the right to scream "retaliation" to a judge is essential. Even if they follow this course, they must prove it happened.
Never ignore the Right to Enter laws in your state. While you may own the property and pay the mortgage, it is the tenant's residence. Every state has laws regarding this issue. Most of the time, it is easy to set up an appointment with the tenant by making a simple phone call or sending a request by letter. If the tenant is not cooperative, following the law is definitely the best course of action.
Never ignore lead-based paint laws if appropriate for your investment. It may seem silly to pay a certified lead-based contractor to do lead-based work, but it is a minuscule amount compared to the significant fines levied for not using the right worker and procedures to handle this issue. This is a health and safety issue for residents.
NEVER avoid a mold issue. Not all molds are toxic, but if they are, property owners can be subject to settlements in the "millions" if they ignore a mold issue. Taking immediate action to discover the mold complaint's nature is the only way to handle this problem. Using qualified mold contractors for toxic mold is a legal requirement. In addition, it is imperative that action continues until it is resolved for all parties.
Never avoid illegal activities. The saying "what you don't know won't hurt you" does not apply to investment property. In today's world, meth and coke labs abound, large marijuana farms are common, identity theft rings are prevalent, and more. This applies to all levels of personal income. You can find crime in the worst and best of neighborhoods. If we notify you of any possible illegal activity, work with us to investigate and eradicate the problem. It may not be easy, but burying your head in the sand can be very costly.
The best course of action for property owners is to avoid any activities that will incur more liability. As your property management company, we will work for you and with you to avoid risk whenever possible to protect your investment.
