Knowing the local and state landlord-tenant laws is one of the most important aspects of owning a rental property. These laws are designed to protect both the landlord and the tenant, and understanding them will help you minimize legal risks.

Many landlords have ignored state and local laws, leading to costly legal disputes and damage to their reputations. Here are the most common lawsuits you could face, and how you can prevent them from happening.

Wrongful Eviction

Tenants sue landlords when they are evicted illegally, usually without proper notice or without fulfilling all the eviction process requirements. If the landlord loses in the court proceeding, the tenant remains in the rental unit, and you may have to pay for court costs and fines.

What You Should Do: Review the lease agreement carefully and document the tenant's violations. You can consult legal advisers and property managers or research eviction laws to ensure compliance.

Violation of Fair Housing Laws

The Fair Housing Act states that a landlord cannot use race, gender, religion, national origin, familial status, disability, or other protected classes as rental criteria. Civil penalties can reach up to $21,663 for the first offense, and repeatedly doing so can lead to penalties of up to $108,315.

What You Should Do: You must educate yourself about your legal responsibilities as a property owner when renting to prospective tenants, especially the legitimate reasons you may have to deny applicants.

Security Deposit Disputes

Most property owners require security deposits to cover potential property damages and dues after the lease expires, such as unpaid rent. If the landlord fails to return all or part of the security deposit within the legal timeframe or fails to provide valid reasons for deductions, the tenant may take legal action.

What You Should Do: If there are damages or the tenant fails to pay rent due, create an itemized list of the deductions, and provide detailed records of the expenses. The whole or remaining security deposit amount must be returned within 45 days of the lease termination and delivery of possession.

Poor Habitability

Landlords are legally required to provide a livable space for renters. If not, they can sue for habitability concerns like pest infestations, mold growth, faulty electrical systems, lack of heat and water, unsafe structures, or other potential risks to their health and safety.

What You Should Do: Conduct regular property inspections throughout the tenant's occupancy to ensure that everything is in working order. Before doing so, provide a written notice stating when the inspection will take place.

Invasion of Privacy

Even if you own the rental property, the tenant has the right to privacy. Landlords can face legal repercussions and damages. It can also negatively impact the reputation of your rental business, leading to fewer prospects.

What You Should Do: Provide notice 24 hours before the inspection, preferably when it's convenient for the tenant. Avoid improper handling of the tenant's property when you're within the rented home.

Negligence and Injury

A resident can file a lawsuit for injuries occurring within the rental property, especially if they were caused by the property owner's negligence. These can be unsafe conditions like poor lighting, broken doors, slippery floors, or infestations.

What You Should Do: Make sure your rental property is always in good condition through regular upkeep and addressing maintenance requests. Check whether your property is complying with local housing codes.

Illegal Rent Increases

There are no state-specific laws in Indiana, but legal issues may still arise depending on the circumstances of why you intend to increase rent. Raising rent to retaliate is against the law, and you must provide notice before raising the rate.

What You Should Do: Before you increase your rent, learn the notice requirements, such as providing it 30 days prior with month-to-month leases. You can include the reason behind the price hike as well.

Violating Service Animal-Related Laws

Even if your rental agreement states that tenants are not allowed to have pets, you cannot deny an applicant solely based on their having a service animal. Under the ADA and Fair Housing Act, you must provide reasonable accommodations. The only time you can refuse a service animal is if they pose a danger to other tenants or create an undue burden on the landlord's property.

What You Should Do: Refrain from asking questions about the applicant's disability or demanding to see certification of the animal's training or status. They don't need to provide evidence. All you can ask is whether they are a service animal and how it helps the potential tenant.

Benefits of Legal Compliance

No Legal Risks: Tenant lawsuits can lead to very high costs. Between attorney's fees to other court-related expenses, you can expect to pay thousands of dollars to correct your mistake.
Reputation Intact: How well your rental business operates hinges on your reputation as a landlord. No one wants to rent from someone who can be unfair or unlawful.
Better Landlord-Tenant Relationship: When your tenants respect you, they will be more likely to follow your rental agreement rules and recommend your rental to potential tenants.
Focus on Profitability: Responding to court orders and proceedings will take up a lot of time, and you're better off improving and managing your rental property to increase your rental income.

How You Can Ensure Legal Compliance

Most landlords rely on legal professionals or research to ensure that they are following every local and state law concerning their rental business. While both are valid strategies, they can either be time-consuming or inefficient.

Your best bet is to hire a professional property management company. At CRM Properties, we have a team of experts who will not only ensure that your rental business complies with all laws but also maximize the potential of your investment property.

You can enjoy the benefits of being a hand-free landlord, wherein you can either sit back and relax or spend your time finding lucrative ventures and expanding your rental portfolio.

Let us help you make the most out of your investment. Contact us today, and we can tell you all about our services.