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Landlords and Tenants

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Thirty years ago, custom, not law, controlled how most landlords and tenants interacted with each other. This is no longer true. Today, whether you focus on leases and rental agreements, habitability, discrimination, the amount, use and return of security deposits, how and when a landlord may enter a rental unit, or a dozen other issues, both landlord and tenant must understand their legal rights and responsibilities.

In this section, you will find discussions of several of the most important legal issues affecting landlords and tenants.

Leases and Rental Agreements

 A lease or rental agreement is a contract that forms the legal basis for the landlord-tenant relationship.

1. Why is it important to sign a lease or rental agreement?

The lease or rental agreement is the key document of the tenancy, setting out important issues such as:
  • the length of the tenancy
  • the amount of rent and deposits the tenant must pay
  • the number of people who can live on the rental property
  • who pays for utilities
  • whether the tenant may have pets
  • whether the tenant may sublet the property
  • the landlord's access to the rental property
  • who pays attorneys' fees if there is a lawsuit.
Leases and rental agreements should always be in writing, even though most states allow them to be oral (spoken). While oral agreements may seem easy and informal, they often lead to disputes. If a tenant and landlord later disagree about key agreements, such as whether or not the tenant can sublet, the end result is all too likely to be a court argument over who said what to whom, when and in what context. This is particularly a problem with long-term leases, so most states prohibit oral agreements that are to last for one year or more.

2. What's the difference between a rental agreement and a lease?

The big difference is the period of occupancy. Written rental agreements provide for a tenancy for a short period (often 30 days). The tenancy is automatically renewed at the end of this period unless the tenant or landlord end it by giving written notice, typically 30 days. For these month-to-month rentals (meaning the rent is paid monthly), the landlord can change terms of the agreement with proper written notice (subject to any rent control laws). This notice is usually 30 days, but can be shorter in some states if the rent is paid weekly or bi-weekly.

A written lease gives the tenant the right to occupy a rental unit for a set term--most often for six months or a year but sometimes longer--as long as the tenant pays the rent and complies with other lease provisions. Unlike a rental agreement, when a lease expires it does not usually automatically renew itself (a tenant who stays on with the landlord's consent will generally be considered a month-to-month tenant). With a fixed-term lease, the landlord cannot raise the rent or change other terms of the tenancy during the lease, unless they are specifically called for in the lease, or the tenant agrees.

3. What happens if a tenant breaks a long-term lease?

As a general rule, neither the tenant nor his or her landlord may properly break the lease before the term ends unless the other party significantly violates the lease. This means that a tenant can legally move out for a good cause--for example, if his landlord fails to make necessary repairs. If the tenant breaks the lease without good cause, he'll be responsible for the remainder of the rent due under the lease term. In most states, however, a landlord has a legal duty to try to find a new tenant as soon as possible--no matter what the tenant's reason for leaving--rather than charge him for the total remaining rent due under the lease.

Tenant Selection

Choosing tenants is the most important decision any landlord makes. To do it well, landlords need a reliable system that helps weed out tenants who will pay their rent late, damage the rental unit or cause legal or practical problems later.

1. What's the best way for landlords to screen tenants?

Savvy landlords should ask all prospective tenants to fill out a written rental application that includes the following information:
  • employment, income and credit history
  • Social Security and driver's license numbers
  • past evictions or bankruptcies, and
  • references.
Before choosing tenants, landlords should check with previous landlords and other references; verify income, employment and bank account information; and obtain a credit report. The credit report is especially important because it will indicate whether a particular person has a history of paying rent or bills late, has gone through bankruptcy, been convicted of a crime or has ever been evicted.

2. How can a landlord avoid discrimination lawsuits when choosing a tenant?

Fair housing laws specify clearly illegal reasons to refuse to rent to a tenant. (See Housing Discrimination for details.) Landlords are legally free to choose among prospective tenants as long as their decisions comply with these laws and are based on legitimate business criteria. A landlord is entitled to reject someone with a bad credit history, insufficient income to pay the rent, or past behavior--such as property damage--that makes the person a bad risk. A valid occupancy policy limiting the number of people per rental unit--that is clearly tied to health and safety--can also be a legal basis for refusing tenants. Landlords can also adopt occupancy standards based on legitimate business reasons or necessities, such as the capacities of the rental property's plumbing or electrical system.

Housing Discrimination

Civil rights and fair housing laws prohibit many types of housing discrimination.

1. What types of housing discrimination are illegal?

The federal Fair Housing Act prohibits landlords from choosing tenants on the basis of a group characteristic such as:
  • race
  • religion
  • ethnic background or national origin
  • sex
  • age
  • the fact that the prospective tenant has children (except in certain designated senior housing), or
  • a mental or physical disability.
In addition, some state and local laws prohibit discrimination based on a person's marital status or sexual orientation.

On the other hand, landlords are allowed to select tenants using criteria that are based on valid business reasons, such as requiring a minimum income or positive references from previous landlords, as long as these criteria are applied equally to all tenants.

Examples of Housing Discrimination

The Fair Housing Act prohibits landlords from taking any of the following actions based on race, religion or any other protected category:
  • Advertising or making any statement that indicates a preference based on group characteristic, such as skin color
  • Falsely denying that a rental unit is available
  • Setting more restrictive standards, such as higher income, for selecting tenants
  • Refusing to rent to members of certain groups
  • Refusing to accommodate the needs of disabled tenants, such as allowing a guide dog, hearing dog or service dog
  • Setting different terms for some tenants, such as adopting an inconsistent policy of responding to late rent payments, or
  • Terminating a tenancy for a discriminatory reason.

2. How does a tenant file a discrimination complaint?

A tenant who thinks that a landlord has broken a federal fair housing law should contact the U. S. Department of Housing and Urban Development (HUD), the agency which enforces the Fair Housing Act. To find the nearest office, call HUD's Fair Housing Information Clearinghouse at (800) 343-3442. HUD will provide a complaint form and will investigate and decide the merits of the claim. Complaints must be filed with HUD within one year of the alleged discriminatory act. HUD will typically appoint a mediator to negotiate with the landlord and reach a settlement (called a "conciliation"). If a settlement can't be reached, the fair housing agency will hold an administrative hearing to determine whether discrimination has occurred.

If the discrimination is a violation of a state fair housing law, the tenant may file a complaint with the state agency in charge of enforcing the law. In California, for example, the Department of Fair Employment and Housing enforces the state's two fair housing laws.

Also, instead of filing a complaint with HUD or a state agency, tenants may file lawsuits directly in federal or state court.

If a state or federal court or housing agency finds that discrimination has taken place, a tenant may be awarded damages, including any higher rent he or she had to pay as a result of being turned down, and damages for humiliation or emotional distress.

Rent and Security Deposits

Most states do not limit how much rent a landlord can charge, but do have rules on the amount, use and return of security deposits.

1. Are there laws covering how much rent a landlord can charge, and when the rent must be paid?

Landlords may charge any dollar amount for rent, except in certain areas covered by rent control (see How Rent Control Works, below).

By custom, leases and rental agreements usually require rent to be paid monthly, in advance. Often rent is due on the first day of the month. However, it is usually legal for a landlord to require rent to be paid at different intervals or on a different day of the month. Unless the lease or rental agreement specifies otherwise, there is no legally-recognized grace period--in other words, if a tenant hasn't paid the rent on time, his or her landlord can usually start eviction proceedings the day after it is due. Some landlords charge fees for late payment of rent or for bounced checks; these fees are usually legal if they are reasonable.

For month-to-month rentals, the landlord can raise the rent (subject to any rent control laws) with proper written notice, typically 30 days. With a fixed-term lease, the landlord may not raise the rent during the lease, unless the increase is specifically called for in the lease, or the tenant agrees.

How Rent Control Works

 Communities in only five states--California, the District of Columbia, Maryland, New Jersey and New York--have laws that limit the amount of rent landlords may charge. Rent control ordinances (also called rent stabilization, maximum rent regulation or a similar term) typically set a base rent for each rental unit, and limit the circumstances and times rent may be increased. Many rent control laws require landlords to have a legal or just cause--that is, a good reason--to evict a tenant--for example, if the tenant doesn't pay rent or if the landlord wants to move a family member into the rental unit. Landlords and tenants in New York City, Newark, San Francisco and other cities with rent control, should be sure to get a current copy of the ordinance and any regulations interpreting it. Check the phone book for the address and phone number of the local rent control board or contact the mayor or city manager's office.

2. How much security deposit can a landlord charge?

All states allow landlords to collect a security deposit when the tenant moves in; the general purpose is to assure that the tenant pays rent when due and keeps the rental unit in good condition. Half the states limit the amount landlords can charge, usually not more than a month or two worth of rent--the exact amount depends on the state.

Many states require landlords to put deposits in a separate account and some require landlords to pay tenants the interest on deposits.

3. What are the rules for returning security deposits?

Landlords may normally make certain deductions from a tenant's security deposit, provided they do it correctly and for the right reasons. While the specific rules vary from state to state, landlords usually have a set amount of time in which to return deposits (usually 14 to 30 days after the tenant moves out--either voluntarily or by eviction). Many states require landlords to provide a written itemized accounting of deductions for unpaid rent and for repairs for damages that go beyond normal wear and tear, together with payment for any deposit balance. A tenant may sue a landlord who fails to return his or her deposit when and how required, or who violates other provisions of security deposit laws such as interest requirements; often these lawsuits may be brought in small claims court. In some states, a tenant may recover the entire deposit--sometimes even two or three times this amount--plus attorney fees and other damages.

Tenants' Privacy Rights

Laws in many states guarantee tenants reasonable privacy rights against landlord intrusions. Typically, a landlord has the right to legally enter rented premises in cases of emergency, in order to make needed repairs (in some states, just to assess the need for repairs) and to show the property to prospective new tenants or purchasers. Many states allow landlords the right of entry during a tenant's extended absence (often defined as seven days or more) to maintain the property as necessary and to inspect for damage and needed repairs. In addition, a landlord may enter rented premises when a tenant moves out without notifying the landlord or by court order. In most cases, a landlord may not enter just to check up on the tenant and the rental property.

States typically require landlords to provide advance notice (usually 24 hours) before entering a rental unit. A landlord or manager may enter rented premises while a tenant is living there without advance notice only in an emergency, such as a fire or serious water leak, or when the tenant gives permission.

Repairs and Maintenance

Under most state and local laws, rental property owners must offer and maintain housing that satisfies basic habitability requirements, such as adequate weatherproofing, available heat, water and electricity, and clean, sanitary and structurally safe premises.

1. What are a tenant's rights if the landlord refuses to maintain the property?

If the landlord doesn't meet his or her legal responsibilities, a tenant usually has several options (depending on the state), including moving out (even in the middle of a lease), paying less rent, withholding the entire rent until the problem is fixed, making necessary repairs (or hiring someone to make them and deducting the cost from next month's rent) or calling the local building inspector (who can usually order the landlord to make repairs). A tenant can also sue the landlord for a partial refund of past rent, and in some circumstances can sue for the discomfort, annoyance and emotional distress caused by the substandard conditions. Tenants should check state and local laws and understand remedies available before taking any action such as withholding rent.

2. What are tenants' repair and maintenance responsibilities?

All tenants have the responsibility to keep their own living quarters clean and sanitary. And a landlord can usually delegate his repair and maintenance tasks to the tenant in exchange for a reduction in rent. If the tenant fails to do the job, however (or does a poor job), the landlord is not excused from his responsibility to maintain habitability. In addition, tenants must carefully use common areas and facilities, such as lobbies, garages and pools.

3. Is a landlord liable if a tenant is injured on the rental property? What if a visitor is injured?

A landlord may be liable to the tenant--or others--for injuries caused by dangerous or defective conditions on the rental property. In order to hold the landlord responsible, however, the tenant must be able to prove that the landlord was negligent, and that the landlord's negligence caused an injury. To do this, the tenant must be able to show that:

  • the landlord had control over the problem that caused the injury

  • the accident was foreseeable

  • fixing the problem (or at least giving adequate warnings) would not have been unreasonably expensive or difficult

  • a serious injury was the probable consequence of not fixing the problem

  • the landlord failed to take reasonable steps to avert the accident

  • the landlord's failure--his negligence--caused the tenant's accident, and

  • the tenant was genuinely hurt.

For example, if a tenant falls and breaks his ankle on a broken front door step, the landlord will be liable if the tenant can show that:

  • it was the landlord's responsibility to maintain the steps (this would usually be the case, because the steps are part of the common area, which is the landlord's responsibility)

  • an accident of this type was foreseeable (falling on a broken step is highly likely)

  • a repair would have been easy or inexpensive (fixing a broken step is a minor job)

  • the probable result of a broken step is a serious injury (a fall certainly qualifies)

  • the landlord failed to take reasonable measures to maintain the steps (this will be easy if the step was broken for weeks, or even days, but less so if the step broke five minutes earlier and showed no previous signs of weakening)

  • the broken step caused his injury (this is easy if the tenant has a witness to the fall, but might be hard if there are no witnesses and the landlord claims that the tenant really injured himself somewhere else and is attempting to pin the blame on the landlord), and

  • he is really hurt (in the case of a broken bone, this is easy to establish).

A tenant can file a personal injury lawsuit for medical bills, lost earnings, pain and other physical suffering, permanent physical disability and disfigurement and emotional distress. A tenant can also sue for property damage that results from faulty maintenance or unsafe conditions.

4. How can property owners minimize financial losses and legal problems related to repairs and maintenance?

Landlords who offer and maintain housing in excellent condition can avoid many problems. Here's how:

  1. Clearly set out responsibilities for repair and maintenance in the lease or rental agreement.

  2. Use a written checklist to inspect the premises and fix any problems before new tenants move in.

  3. Encourage tenants to immediately report plumbing, heating, weatherproofing or other defects or safety or security problems--whether in the tenant's unit or in common areas such as hallways and parking garages.

  4. Keep a written log of all tenant complaints and repair requests with details as to how and when problems were fixed.

  5. Handle urgent repairs as soon as possible. Take care of major inconveniences, such as a plumbing or heating problem, within 24 hours. For minor problems, respond in 48 hours. Always keep tenants informed as to when and how the repairs will be made, and the reasons for any delays.

  6. Twice a year, give tenants a checklist on which to report potential safety hazards or maintenance problems that might have been overlooked. Use the same checklist to inspect all rental units once a year.

Landlord-Tenant Dispute Resolution

Legal disputes--actual and potential--come in all shapes and sizes for landlords and tenants. Whether it's a disagreement over a rent increase, responsibility for repairs or return of a security deposit, rarely should lawyers and litigation be the first choice for resolving a landlord-tenant dispute.

Both landlords and tenants should follow these tips to avoid legal problems:

  1. Know your rights and responsibilities under federal, state and local law.

  2. Make sure the terms of your lease or rental agreement are clear and unambiguous.

  3. Keep copies of any correspondence and make notes of conversations with your tenant or landlord about any problems. For example, a tenant should ask for repairs in writing and keep a copy. The landlord should keep a copy of the repair request and note when and how the problem was repaired.

  4. Keep communication open. If there's a problem--for example, about the landlord's right to enter a tenant's apartment--see if the issue can be resolved by talking first, without running to a lawyer.

  5. If you're unsuccessful at working out an agreement, but want to continue the rental relationship, suggest mediation by a neutral, third party (often available at little or no cost from a publicly-funded program).

  6. If it doesn't make sense to attempt to mediate, pursue other legal remedies. If the dispute involves money, such as return of the security deposit, take the case to small claims court. The maximum amount you can sue for varies from state to state, but generally is less than $3,500.

  7. Find out whether there is a tenants' union or rental property owners' association in your area, and if so, contact that organization for advice.

  8. See a lawyer. Be sure to choose someone who has experience in handling landlord-tenant matters and, if possible, is recommended by someone whose judgment you trust.

Ten Tips for Being a Successful Landlord

By Marcia Stewart and Attorneys Ralph Warner & Janet Portman (Nolo Press).

1. Don't rent to anyone before checking their credit history, references and background. Haphazard screening too often results in problems--a tenant who pays the rent late or not at all, trashes your place or moves in undesirable friends--or worse.

2. Get all the important terms of the tenancy in writing. Beginning with the rental application and lease or rental agreement, be sure to document important facts of your relationship with your tenants--including when and how you handle tenant complaints and repair problems, notice you must give to enter a tenant's apartment and the like.

3. Establish a clear, fair system of setting, collecting, holding and returning security deposits. Inspect and document the condition of the rental unit before the tenant moves in to avoid disputes over security deposits when the tenant moves out.

4. Stay on top of repair and maintenance needs and make repairs when requested. If the property is not kept in good repair, you'll alienate good tenants. And they may have the right to withhold rent, sue for any injuries caused by defective conditions, or move out without notice.

5. Don't let your tenants and property be easy marks for a criminal. You could well be liable for the tenant's losses. Landlords are sued more than any other group of business owners in the country. The average settlement paid by a landlord's insurance company is $600,000, and the average jury award is $1.2 million.

6. Respect your tenants' privacy. Notify tenants whenever you plan to enter their rental unit, and provide as much notice as possible, at least 24 hours or the minimum amount required by state law.

7. Disclose environmental hazards such as lead. Landlords are increasingly being held liable for tenant health problems resulting from exposure to environmental poisons in the rental premises.

8. Choose and supervise your manager carefully. If a manager commits a crime or is incompetent, you may be held financially responsible. Do a thorough background check and clearly spell out the manager's duties to help prevent problems down the road.

9. Purchase enough liability and other property insurance. A well-designed insurance program can protect your rental property from losses caused by everything from fire and storms to burglary, vandalism, and personal injury and discrimination lawsuits.

10. Try to resolve disputes with tenants without lawyers and lawsuits. If you have a conflict with a tenant over rent, repairs, your access to the rental unit, noise or some other issue that doesn't immediately warrant an eviction, meet with the tenant to see if the problem can be resolved informally. If that doesn't work, consider mediation by a neutral third party, often available at little or no cost from a publicly-funded program. If your dispute involves money, and all attempts to reach agreement fail, try small claims court where you can represent yourself. Use it to collect unpaid rent or to seek money for property damage after a tenant moves out and the deposit is exhausted.
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