Serving an apartment or rental community as the property’s manager or landlord can be a great experience. Developing relationships with your tenants, taking care of their building-related needs, and knowing that you’re providing them a wonderful and safe place to live is rewarding. You may even have the added benefit of living onsite and enjoying your complex’s amenities, rent-free.
If you’re an individual property owner with a few houses for rent, your benefits are even greater. You’re dealing with fewer tenants, reaping the financial rewards of rental payments, and saving an incredible amount of money from rental-related tax deductions.
Unfortunately, these advantages are sometimes offset by the less exciting aspects of the job, including the potential liabilities that you face as a landlord or rental property owner. A necessary risk of opening the doors of your property to strangers is that something might occur on the premises that causes harm to a tenant, visitor, or neighbor, or damages their personal property. Some of these liabilities may be out of your control. Fire, hail, or wind damage, for instance, should be covered by your building’s property insurance policy. However, other liabilities can be avoided with regular property inspections, thorough policies and procedures, and cautious and reasonable actions.
If someone is injured on your property due to your negligence, you, as the property owner or landlord, could be held liable. For example, if you don’t fix a broken window and a burglar uses this to gain entrance and rob a tenant, you will be held responsible. Or if someone falls off of a balcony because a railing is not secure, you could be liable for their injuries. Although your insurance policy may include coverage for liabilities like these, you may still face a civil lawsuit.
Foley, Lamy, and Jefferson, personal injury lawyers in New Orleans who handle such cases, write that liability can be proven if the plaintiff can show that the “property owner ‘knew or should have known’ of the hazardous condition.” To protect yourself from these types of liabilities, make it a habit to inspect your property on a regular basis (not just when you have a new tenant moving in), and respond within a reasonable amount of time to reports of or requests for maintenance.
While your inaction as a landlord can lead to liabilities due to negligence, your actions can also present a risk potential. Any type of character defamation, including libel, slander, or invasion of privacy, could result in a lawsuit, even if your actions were unintentional. For example, if someone contacts you as a reference for a former tenant, you should be very careful about what you share. If you do choose to provide a reference (which you’re not required to do), be careful to not inadvertently say anything that could be considered defamatory.
If your responsibilities include the screening and selection of tenants, you should be especially careful to avoid potential litigation. First, when determining your property’s selection criteria, be sure that any policies you create can be proven to be in the best interest of the property’s management and other tenants, and always be consistent in applying the rules. For example, consider a situation where a tenant screening process reveals a bankruptcy in a credit report or a two-year-old conviction for theft in a criminal background check for a minority applicant. If these conditions don’t meet your screening criteria and you deny the application, you shouldn’t make an exception for a white candidate with similar reports; this type of selective decision-making could be considered discriminatory and you could be held liable.
Serving as a landlord is a rewarding venture, but be sure to have proper precautionary measures in place to avoid potential liability issues.