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Landlord Rights and Responsibilities

As Jason Hartman advises, one of the best ways to create retirement income is to invest in rental property. But this strategy depends on managing the rental side of the equation. If you own rental property, you’re entering a landlord-tenant relationship with your renters, and it’s important to know the rights and responsibilities that both sides have toward the property.

Every state has its own statutes governing the obligations of landlords and tenants. These cover issues such as who has the responsibility for various types of maintenance, how rents and security deposits are handled, and what recourse is available for broken agreements and disputes. In general, most landlord-tenant statutes establish the following areas of obligations for you as landlord and for the tenants of your rental properties:

Landlords are expected to:

  • Make sure that the property is safe and habitable before tenants move in. This includes ensuring that the property meets all the requirements of local building and sanitation codes, and that all equipment such as furnaces and coolers are working properly.
  • Maintain the property on a regular basis. The landlord is responsible for making repairs that arise from normal wear and tear over the course of time. If a repair is needed because of some action of the tenant’s, the landlord can require the tenant to cover the expense. For example, if a window needs replacing because of age or general use, the landlord is responsible. If the same window is broken because a tenant’s child threw a baseball at it, that’s the tenant’s responsibility.
  • Keep utilities running and not turn off the water, gas or electricity to force a tenant to vacate the property or pay rent. Landlords can either assume the utility payments as part of the rent, or have the tenant pay for them separately. In that case the contract is between the tenant and the utility companies, so if the tenant doesn’t pay the bills, the utility company has the right to suspend the service – not the landlord.
  • Provide written notice to tenants of all changes in management, upcoming repairs and maintenance, or any other ongoing issues related to the property.
  • Maintain a non-discriminatory atmosphere and observe local and federal anti-discrimination policies in selecting renters and managing the property.

For their part, renters have obligations too. Depending on the actual stipulations of the rental agreement, tenants generally are responsible for:

  • Paying rent on time, or notifying the landlord if other arrangements must be made.
  • Take reasonable and ordinary care of the property. This includes notifying the landlord of upkeep and maintenance issues, and taking responsibility for damage caused directly by the actions of the tenant or their family members.
  • Observing the terms of the rental agreement and not subleasing the property, or bringing in other occupants without the landlord’s permission.
  • Disposing of garbage and keeping the property clean and sanitary.

A well-written lease should clearly establish who has responsibilities for these and all other relevant areas. The lease, or rental agreement, is a legal document that can be enforced in court if necessary, so it’s a good idea to spend some time fine-tuning it. Knowing the rights and responsibilities of both sides in the rental relationship can keep your investment enterprise running smoothly. (Top image: Flickr | Commercial Cleaning Maryland)

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