One of the most critical components of a successful rental business is keeping your renters safe. If you fail to protect their welfare as they occupy your units, you might be liable for injuries and damages.
Of course, this doesn’t imply that you’re accountable for every incident.
Both you and your residents have specific responsibilities regarding the safety and security of a property, according to landlord-tenant laws. However, if a renter proves that they suffered because of your negligence, they have the right to sue you. Premises liability or personal injury claims can be costly, and court trials can be tedious and time-consuming. According to Brown & Crouppen, personal injury settlements can amount to as much as $62,000.
Given these consequences, being aware of the issues you might encounter as you run your business and how to prevent rental owner liability issues, is in your best interest! Don’t worry, we’re here to help.
Knowing the Different Owner Liabilities
Taking a proactive approach to maintaining safety around your property is the most practical way to avoid legal trouble. Below are some of the risks that you should be wary of:
Implied Warranty of Habitability
The law requires all property owners to provide livable units for their residents, regardless of their rent. In legal terms, this duty is known as the “implied warranty of habitability” and is recognized in all states except Arkansas.
Under the implied warranty of habitability, your property must meet certain standards to be considered a habitable rental home. Though these standards may vary across states, the basic requirements of livable housing typically include:
- Roofs, floors, walls, and stairs that are safe and structurally sound
- Enough cold water, hot water, heating, and cooling, depending on the climate
- Working electricity and plumbing
The implied warranty of habitability begins the moment you start leasing your property. Consequently, failing to provide the basic amenities your residents need for safe and secure housing means you’ve already violated the warranty.
Landlord-tenant laws indicate that renters can only sue you for an injury if they can prove you’re responsible for it. An important legal term you should be wary of is the concept of “proximate cause.” Courts will identify a proximate cause as a person who is legally responsible for an injury even if their actions didn’t directly cause any of the damages.
You may be accountable for a renter’s injuries if:
- Your failure to maintain some aspect of the property, such as the flooring, stairs, or other fixtures, caused the injury.
- You forgot to disclose any safety hazards adequately.
- You did not take the necessary precautions to prevent an easily foreseeable accident.
You failed to repair a serious safety hazard in time.
It can be easy to become confused about landlord liability for tenant injuries. A good rule of thumb is to exercise reasonable care over your units. Doing so requires you to handle the duties that every competent property owner is expected to perform, which include conducting regular inspections and promptly addressing maintenance issues. If you’re committed to preventing rental owner liability issues, it’s best to prioritize the overall upkeep of your units.
In most states and jurisdictions, you can be held responsible by a resident if they suffer from any criminal activities that occur on your property. However, they are not allowed to blame you for all crimes in the neighborhood. In this case, you can only be liable for crimes resulting from your failure to implement building security measures. This can happen if you’ve ignored certain regulations about the locks in your buildings or made your rentals an easy target for criminals in the area.
Similarly, if you’re caught renting your units to residents involved in illegal activities, you may face some legal consequences too. You can be sued if one of your renters is harmed because of the crimes on your property. In some regions, your rental property can be confiscated, or you may face the same charges as your residents.
Maintaining a suitable living environment for your renters also means protecting them from various substances in the surrounding environment that might cause health problems. If your rental unit was built before 1978, it’s essential to be mindful of the U.S. Environmental Protection Agency’s (EPA) guidelines.
The Residential Lead-Based Paint Hazard Reduction Act requires you to inform your residents about any lead-based perils around your property. Upon signing or renewing a lease, you must also ask them to sign a disclosure form to verify that they’re fully aware of the lead-related risks they will encounter.
Apart from lead, some homes built before 1981 may also have asbestos in the insulation and other building structures. No specific statutes require property owners to disclose any asbestos-related risks in the unit. But, if your residents develop health problems related to this, they can argue that you’ve failed to maintain livable conditions.
The same rules apply to mold infestations. Though no state laws explicitly outline if there are any mold exposure limits for rental homes, you can still be held liable if mold on your property causes health problems.
Becoming well-versed in the different risks associated with your units offers insight into the measures you should take to protect your renters.
Avoiding Potential Liabilities
Although removing all potential dangers is impossible, you can implement measures that greatly minimize the risk of encountering legal problems with one of your residents. Consider the following methods to prevent rental owner liability issues:
It’s possible to conduct the screening yourself, but it may be time-consuming and tedious. You may also find that you’ve unknowingly discriminated against a prospective resident by violating Fair Housing Act rules. Consider consulting the assistance of a tech-enabled property manager who can do the screening on your behalf and ensure that objectivity is maintained all throughout the process.
Prioritize Maintenance and Repair
Conducting routine inspections of your property can ensure that you’re aware of any repair jobs that need to be addressed immediately. Creating a maintenance checklist can help you stay on top of the different areas of your property that may pose a risk for your renters.
The timeline for emergency and non-emergency repairs varies depending on your state. In California, you’re given a maximum of 30 days to attend to correct any non-urgent issues around the property. Emergency repairs directly affecting your residents’ safety and health typically require a shorter timeline. If a furnace breaks down or the water stops running, you’ll have to get these fixed within a reasonable time ranging from 24 hours to seven days.
Implement Sufficient Security Measures
Protecting your renters from potential crimes in the neighborhood means installing the necessary security features and devices on your property. One way you can mitigate the risk of crimes is by following the specific state and local regulations about minimum security for your buildings.
According to the Metropolitan Tenants Organization (MTO), you should change your apartment’s locks every time a new resident moves in. It also pays to know the appropriate types of locks used specifically for doors and windows on rental properties.
Paying a small price to avoid crimes and protect your renters significantly outweighs the damage and legal fees you’ll face if a crime occurs on your property.
Incorporate Specific Rules in the Lease
Ensure that you include provisions in the lease designed to minimize confusion surrounding your and your renter’s responsibilities. The document should state the areas of the property you’re responsible for maintaining. It should also outline the different ways your renters are expected to maintain the safety and security of your unit.
It’s also important to mention the penalties your residents may face if they are caught engaging in illegal activities on your property.
Get Proper Landlord Insurance
Apart from gaining a deep understanding of your legal responsibilities, it’s also essential to have proper insurance in place. Your existing homeowners’ insurance policy doesn’t cover any of the rental homes that other people occupy. Protection against property damage, loss of rental income, or renter injuries is usually provided by landlord insurance.
It can also be beneficial to encourage your residents to purchase renters’ insurance which covers any injuries or damages caused by their pets, families, or visitors.
Risks will always be present in any rental business. Taking the necessary measures to mitigate or prevent these incidents is the key to protecting your renters and preventing rental owner liability issues at the root.
As the rental owner, you’re responsible for keeping your residents safe and secure throughout the lease. To protect yourself against expensive lawsuits and claims, it pays to know about the different owner liabilities and how you can maintain the safety and security of your units. Taking a proactive approach by addressing the risks and obtaining proper insurance are a few ways to avoid legal pitfalls while keeping your units habitable.