10 Best Practices to Prevent Tenant Lawsuits

Written by on December 23, 2013

Preventing Tenant LawsuitsAs a Landlord, you need to be a hardworking, proactive and attentive in order to prevent tenant lawsuits.

No one wants to go to court.  In fact, most landlord-tenant claims and lawsuits could have been easily prevented.

By implementing excellent property management practices, you can eliminate the majority of reasons why a tenant might sue you.

Here are my top 10 best practices to help you prevent and avoid tenant lawsuits.

1. Screen Tenants Properly

Although it might take some time, it is extremely important to screen any potential tenant. Check their background, credit history, and criminal record.

Aside from checking references, you can use various tenant screening software tools to help you perform these tasks.  The folks over at Cozy even provide you verified employment history by giving you access to their LinkedIn employment record.

Thorough screening will usually prevent future problems that might arise – such as a tenant who trashes your place, one who doesn’t pay rent, or one who lets undesirable individuals move in.

2. Show Respect and Be Fair

Remember the Golden Rule?  Follow it.

Don’t treat your tenants like second-class citizens.  They are paying your mortgage, so show them some respect.  Treat them as you would want to be treated, and treat each tenant equally – otherwise they can hit you with a discrimination lawsuit.

3. Document Everything

Lease contracts set the rules that both landlords and tenants agree to follow in their relationship. A lease is a legal document that includes all business details, such as the rent, terms of tenancy, limits of occupancy, fees and deposits, repairs, entry to rental property, and other restrictions.

Some landlords want to include specific clauses unique to their property.  If you do this, make sure you start with a base lease template that has been reviewed by a lawyer for your state.

4. Keep Them Informed

Let your tenants know of any possible situation that may cause them inconvenience. If there’s a mold infestation on the property, inform them. Many landlords have reached the civil court level due to tenant health problems resulting from environmental toxins in the premises.

5. Provide Safe and Secure Premises

Tenants would love to stay longer in a safe and secure environment. Don’t let your property be an easy mark for thieves and other criminals. Assess your property and take measures to protect it. Landlords may be held liable for losses within the premises.

6. Stay On Top of Repairs

When a tenant requests for repairs, set up a time that works best for the tenant to come and inspect the damage. Tenants will respect you if you let them know when you plan to stop by. After the inspection, schedule the repair immediately using your little black book of contractors (free template).

The faster you make the repairs, the happier your tenants will be. Also, without immediate action, tenants can sue you for injuries caused by a defective condition.

After the repair is finished by a contractor, remember to follow-up on all work to ensure it was done to your (and the tenant’s) satisfaction.  Just because a contractor says a project is complete, doesn’t mean it actually is.

7. Know the Laws

Each state has its own housing laws. As a landlord, it is important to be familiar with the landlord-tenant act that in your area. You need to know all the state statutes regarding rent, obligations, rights, security deposits, and evictions. Violating even one of your tenant’s rights can lead you to a dissatisfied tenant, and worse – a lawsuit.

8. Be Available

Respond promptly if your tenants call or leave a message. If you are going on a long trip, let them know beforehand. Unavailable landlords produce unhappy tenants.

Listen to their concerns and if you can do something about it, tell the tenant you’re on to it and then do so. If there is a dispute between two of your tenants, you could become the mediator – but don’t get sucked into something that’s not your business.

Do your best to make the tenants feel that their concerns are addressed.  I suggest even being available via text message.

9. Reward Good Behavior

It pays to be nice. If they paid rental on time or in advance, you can reward them with movie tickets, chocolates, or anything nice you’d think they’d like.  Consider these 16 gift ideas for tenants.

Try to be compassionate to your tenants – especially the good ones – who just happens to have a one-time problem.  However, never break your own lease rules when trying to be compassionate, otherwise tenants will start to take advantage of your soft side.

When your tenant asks to waive his late fee, consider forgiving a late fee once, but only once.

When tenants feel they have an understanding landlord, they might think twice before filing a lawsuit against you.

10. Ask for Professional Assistance

If you are evicting a tenant for the first time, being sued for injury, audited by the IRS, having a competent attorney by your side is a smart move.

You could hire a full time attorney, or you could save some money by looking into a prepaid legal plan. These types of plans allow you to consult with an attorney for only a low monthly fee. I’ve used Legal Shield before, and consider them reputable.

photo credit: Thomas Hawk via cc
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7 CommentsLeave a Comment

  • Shawn Roman

    Another awesome & informative article full of great insight! Thanks Lucas!

  • Jerred Morris

    #3 and #4 are key to a successful landlord/tenant relationship. I would also like to add that you need to be great at managing expectations. Before you make a change to the property or the rental agreement you should ask yourself how the tenant is going to see the “change”.

    • Lucas Hall

      Hey Jerred,

      Totally! Managing expectations is so key! I like to manage my tenant’s expectations by taking them to coffee at the lease signing, and walking through EVERY clause with them – making sure they understand everything. It’s a little cumbersome, but those are the tenants that always give me the least amount of trouble later on.

  • Sinead King

    Thank you for such a great list.
    Following up on work done is so important. It is going that extra step to ensure that your tenant is happy.
    I also use my trusted contractors, gardeners etc as a source to keep me updated on potential problems at the property. Gardeners for instance visit the property on a far more frequent basis that a landlord can (or should). They can update you on issues that may need your attention, be they tenant or rental related.
    I spend quite a bit of time screening my workmen to ensure that we have a good relationship and work as a team in maintaining both the property and an excellent relationship with the tenant.

    • Lucas Hall

      Thanks for your comment Sinead. It’s so true!… your contractors become an extension of yourself. If a contractor is rude to your tenant, then its the same as you being rude. Unfortunately, a contractor and can make or break your relationship with your tenant – which is why it’s so important to pick your contractors carefully.

  • Mark Hsu

    Great to hear that Cozy will verify employment history by giving you access to the LinkedIn employment record. However, that will only cover 30% of US population. Many accounts are duplicate or no longer in use. Maybe an old fashioned employer call is still needed?

    • Lucas Hall

      Hi Mark,
      Thanks for the feedback. The thing I like about Cozy is that it not only imports a renter’s LinkedIn employment history but it will send an verification email to the current work email address to confirm that they actually work there. Pretty smart, right!

      The only thing it can’t do is verify the actual salary or income amount – which an HR rep isn’t going to give out on the phone anyway. If the applicant is forging W2s or paystubs, then hopefully there will be other red flags too.

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