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Jackpot! 10 Landlord Rights That Truly Empower and Increase Profits

What are Your Rights as a Landlord?

It’s common to talk about tenant rights, but what are your rights as a landlord?

Even though landlords must be mindful of the laws protecting tenants, such as the Fair Housing Act, rental control laws, and privacy rights — there are plenty of rights that landlords hold. Rights that include the ability to choose the tenant set the terms of the lease, and the ability to evict lease-violating tenants. 

This article will give you an overview of your rights as a landlord, the terms and conditions surrounding them, and the resources you need to feel empowered as a rental property owner. 

Selecting the Tenant

It’s a landlord’s right to choose the tenant that lives in their home. However, the decision has to be based on legitimate financial reasons while avoiding discriminatory behavior. In other words, landlords have the right to select the candidate that best meets the landlord’s criteria. 

The goal of selecting the best candidate is to lower eviction risk and keep your house and neighborhood safe. The ideal situation is renting to a tenant who will take good care of the property and afford to stay in the property long-term. 

That is why landlords can set criteria that all candidates must meet to be eligible. These can include a certain credit score, monthly income, no prior evictions, taking negative references into account, etc., and the landlord’s right to choose the candidate that best meets those criteria. These factors are discovered primarily through tenant screening. 

Landlord rights

Tenant Screening

Not only do landlords have the right, but it’s also highly recommended for landlords to screen tenants before signing a lease agreement. Part of tenant screening includes performing a background check, viewing credit scores, rental history, and income verification. 

This ensures that a candidate meets the criteria and reveals any red flags (such as they stopped paying rent and were evicted out of their last rental). 

The Fair Housing Act

It’s critical to remember that while you get the final say on who rents the property, you must abide by the Fair Housing Act and any other state/local laws protecting against discrimination. 

These laws forbid a landlord from refusing to rent a property to a tenant because of:

  • Sex
  • Race
  • Familial Status
  • Nationality
  • Gender
  • Religion

 

These laws don’t include credit score, monthly income, or past rental history, which are all valid criteria for evaluating and accepting or rejecting a potential renter, as long as the criteria are the same for every candidate, regardless of gender, religion, etc. 

Setting the Terms of the Lease

This is where landlords have the most say in the rental process. Unless you’ve hired a property management company or a lawyer to draft the lease for you, you have full control (within reason, of course) of the lease agreement’s terms. 

Rental Agreement

As the landlord, you get to set the conditions for tenants who rent the property, such as:

  • House rules (smoking, noise limits, illegal activities, etc.)
  • Pet allowance (allowed/not allowed, what pets are allowed, how many, etc.)
  • Rent stipulation (how/when rent is paid)
  • Occupancy limits 
  • Length of lease (month-by-month, 3-month, 12-month, etc.)
  • Penalties if the tenant breaks the lease (there may be state laws determining how much you can charge, so it’s important to do your research)

 

All of these conditions can be included in your lease or rental agreement–and to save yourself the trouble, it’s good to be as specific and clear when listing the terms as possible. 

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Rental Rate

As the landlord, you can set the rental rate and the security deposit amount. While the rental rate amount is completely up to you, local rent control laws may limit how high you can charge for rent, so be mindful of those.  

It’s also important to check and see if there are limits to how high you can set the rental deposit and late fees for not paying rent on time. Even setting the laws aside, it’s good practice to be reasonable when setting each amount.

If you want to learn more about determining the rental rate, we suggest you read this article.>>

Evicting Tenants 

When tenants aren’t abiding by the lease, eviction becomes a legitimate option for landlords.

Some plausible reasons for a landlord to evict a tenant are:

  • Not paying rent or consistently late in making payments 
  • Committing a crime
  • Violating the lease
  • Disturbing neighbors 
  • Destroying property
  • People living in the property who aren’t on the lease

 

If a tenant commits any of those acts, it is within your rights as a landlord to evict the tenant. Of course, the best action is to avoid eviction when possible. It can be a very messy, time-consuming, and costly process. 

But if the tenant is causing harm or refuses to listen to you or change the problem, it’s good to remember you have the right to evict and protect your investment.

Choosing to Sell the Property

As the property owner, landlords have the right to sell whenever they like. If the lease is up and you no longer have tenants in the house, or you have a month-to-month agreement where you can give a 30-day notice (or whichever amount is required by law), it’s as simple as waiting until the renters have moved out and selling the home like you would a non-rental property. 

As long as you abide by state laws and respect tenants’ rights, you can sell even if tenants live in the property. There are just a few things to keep in mind.

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How to Sell if a Tenant is Still in the Property? 

When selling a property with tenants in place, you have a few options.

Have a Clause About Terminating the Lease When Selling

A ‘lease termination due to sale’ clause should include before the tenant even moves into the home. As long as it aligns with state and city laws, you can add a clause to your lease stating how long the tenant has (for example, 30-60 days) before they need to vacate the property.

Unless you have just cause (such as the tenant breaking the terms of the lease) to terminate the lease, attempting to break the lease early without cause can lead to you paying an extra fine or being sued. However, if you include a clause stating that the lease will be terminated in the event of a sale, that agreement stands.

Sell to a Real Estate Investor

Another great option is to find a local investor who may want to buy. By selling to an investor, they will simply take over as landlord while your current tenant stays in the property. They would simply proceed by drafting up a new lease agreement.

Sell Without Evicting the Tenant

The lease will still stand between the tenant and the property, even if you sell it. Since the lease agreement is technically between the tenant and the property, new owners will often respect that lease until its term is over. While it can make showing and marketing the house challenging, selling the home while renters reside in it is still possible. 

Deciding to No Longer Rent the Property

If you decide that you no longer wish to rent out the property, there is no law stating that once a property is a rental, it must stay a rental. 

While there is still a tenant living on the property, depending on the lease, there are different ways to go about it. If the lease is month-to-month and no rental control laws require a just cause, you can (depending on the laws in your state/city) give a 30-60 day notice and evict the tenant. However, if it’s a longer lease, such as a year, you can simply not renew the lease once it’s up (it’s worth noting that some states/cities require the owner to give the tenant a notice of wishing not to renew).

In situations when you need the rental right away for yourself or a family member, there are options you can take. Depending on the state, in states with rental control laws and just cause is needed for eviction, you can use an OMI (Owner Move In) Eviction

OMI applies when you or a spouse/child/parent needs to move into the property. It must be done according to state and local laws, has conditions (such as you or the relative must move into the property within a set time), and must be done in good faith; however, it can be done in cities where it’s included in the local statutes.

Owner eviction requirements vary from state to state and can even be prohibited. We recommend hiring a lawyer to assist you if you decide to go through with the process, as landlord/tenant laws vary and can get you into a lot of trouble if not handled correctly. 

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Rights Provided Under the Uniform Residential Landlord Tenant Law

The Uniform Residential Landlord Tenant Law (or URLTA) was created for fairer dealings between tenants and landlords. In and of itself, it does not favor landlords or tenants. However, URLTA includes provisions that add to your rights as a landlord. 

When Landlords have Permission to Enter 

Under URLTA, when a tenant submits a maintenance order, you have the right to enter the property at any time–even without notice. However, it’s always good etiquette to be respectful and notify the tenant before entering the home. 

Keeping a Security Deposit

If you ever refund a security deposit, you get to keep that money if the tenant doesn’t cash that check within 180 days.

Left Behind Property 

After the termination of a lease,  if the tenant leaves their property in the home for over 14 days, you can legally do whatever you want with the property. Whether selling it, keeping it, or throwing it in the dumpster. 

In the Case of a Holdover

A “holdover” is when a tenant remains in the property without your consent after the termination of the lease happens. When a holdover occurs, you’re entitled to either damages or up to three times the amount of the monthly rental rate–whichever is higher. 

Of course, there are many other provisions and conditions included in URLTA. If you want to educate yourself further, we recommend that you read this article, where we cover it in more detail.>>

Final Thoughts 

There are a lot of steps, laws, and responsibilities involved in owning a rental property and housing tenants. It’s important to remember that you have rights as a landlord, and there are provisions available for you to protect your investment and keep your best interest in mind.

While options are available, it’s critical to remember that laws in each state and city are different. Checking the local and federal laws before you make a decision will save you a lot of time and money–and keep you out of hot water. Talking to your local property manager is a great way to learn the laws. They have boots on the ground and know firsthand the local laws, how they’ll impact you, and what you need to know to protect yourself legally. 

Here at Evernest, we have property managers in over 25 markets. You can contact a property manager in your area today.>>

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