October 29, 2018

Updated October 21st, 2020

Being a landlord is about much more than sitting back and collecting rent checks. While it can be a good way to make some money, managing a rental property comes with a lot of responsibility.

Of course, there are apparent obligations like maintaining the property and managing the operation's finances using things like an apartment pricing tool to make sure your rents are competitive and other online calculators. But beyond that, you have several legal issues that come with being a landlord. 

Here are a few of the essential legal tips for landlords that are just starting.

Make a Lease Agreement

You should always make a formal lease agreement for every client. A lease lays out the terms of the agreement between a landlord and a tenant, and it ensures that both parties have certain rights and protections.

For example, you may ask all potential tenants to purchase apartment insurance. The lessee may agree to get a policy but avoid getting one after they're moved in. Without a written lease between you and your tenants, it might be difficult to prove some of the agreed-upon contract terms. If an issue does occur and you do not have a lease in place, you may not have the protection you need. The lack of a lease could also make it more difficult to enforce the terms of the agreement.

Investigate Tenant Finances

You need to make sure your tenants can pay the rent. You might have rental units that need to be filled, and checking a potential renter's finances may seem like extra work. But, it could save you a lot of trouble in the long-term.

Have every prospective tenant fill out a rental application that includes financial information. Additionally, get them to agree to a credit check and provide you with a salary verification from their employer. These steps may add to the work that goes into finding new tenants, but it can help you prevent the issues of having a tenant that does not pay the rent.

Know the Rights of Landlords and Tenants

State, federal, and local laws guarantee certain rights to tenants. Along with that, landlords also have a variety of different rights to the property. Before you start renting out a property, you should take the time to familiarize yourself with your rights as a landlord and learn about tenants' rights. With many of these rights, it does not matter what the lease says; you could end up in serious trouble if you violate them.

Understand Your Lease

When you are drafting your standard lease, take the time to learn about all of the terms. If you don't understand your lease terms, you might accidentally violate the contract, which could cause all sorts of problems.

When you violate a lease, it could lead to issues with the local housing authority. It may also give your tenant cause to take you to small claims court. To avoid these types of problems, you need to understand your lease and abide by its terms.

Collect a Security Deposit

Even the best tenants have the potential to cause damage to your rental property. With a security deposit, you can guarantee that you will at least have some funds to offset the cost of any repairs.

As an additional benefit, the security deposit provides tenants with a motivation to do what they can to keep the rental in good shape. 

However, if you are going to collect a security deposit, you should walk the property with every new tenant and have them sign off on an inspection worksheet.


Becoming a landlord may seem intimidating at first, but keeping these points in mind will help ease you into it. Taking care to understand and follow all necessary rules will help to keep you in business. As you transition into your new role, be sure to hold both yourself and your renters accountable.

Written by: Robert Dornan

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