Avoid a lawsuit: top 4 reasons tenants sue their landlords

Written on December 27, 2017 by , updated on December 3, 2019

College StudentThe one and only time I received a notification I was being sued by a tenant was last June. My husband and I had friends over, and we were getting ready to go to a street fair.

He decided to grab the mail before we went out, and his eyes went wide as he slid a letter across the counter to me. There it was. A pink slip notifying us that we were being sued by our tenants who moved out two months prior.

As much as I would like to say I was stunned, I wasn’t. The signs were clear. In fact, when I emailed my former tenants a bill with photos of the damage and receipts, they emailed me back that they would see me in court. I half thought it was an empty threat, but that half was wrong.

4 reasons tenants sue their landlords

There are many reasons tenants sue their landlords and vice versa. Landlords need to stay informed about the reasons tenants sue. It’s a situation you can avoid with the right communication and knowledge.

1.  Unjustly withholding or mishandling the security deposit

Each state (and sometimes city) has different tenant/landlord laws. Landlords and tenants need to be aware of these laws. And tenants should read their leases carefully so they understand how they can get their security deposit back.

Normal wear and tear, for example, cannot be charged to tenants. However, what constitutes normal wear and tear varies.

Related:  The ultimate guide to normal wear and tear

Landlords can withhold from the security deposit for the following:

  • Unpaid rent
  • Cleaning the unit
  • Making repairs
  • Replacing damaged or lost furniture

However, tenants can sue if they think they are being charged unreasonably.

A tenant can also sue if a landlord mishandles the security deposit by charging more than the state allows or does not follow other state security deposit guidelines.

What to do

In the lease, communicate clearly what constitutes normal wear and tear and what issues tenants will be charged for. Make sure to complete a pre-move-in inspection with images that have the date.

I like to take this a step farther and keep this documentation in a shared Google Drive folder so tenants have access to view the images and inspection. The tenant can view the folder to review photos, the inspection, and to complete their own move-in inspection. The tenant move-in inspection is a great way to document the tenant’s approval of the unit, while at the same time, giving the tenant their own voice.

Above all, review your state’s security deposit guidelines to ensure compliance. Something as simple as returning the security deposit too late can result in a lawsuit.

2.  Having illegal clauses in the lease

While there is leeway in leases, every clause in a lease needs to be legal. The landlord has the leeway to refuse tenants with pets, for example. But legally, they don’t have the latitude to restrict service animals.

Another common illegal clause involves notice. How much notice a landlord needs to give before entering a property is often dictated by state law. Tenants and landlords should know the correct notice required in their location and have it stated correctly in the lease. If there is no state law on this, a lease clause is helpful for both parties.

Landlords can hire an attorney to write up their lease, specific to the location of the property, to ensure everything is legal.

What to do

Make sure your lease is compliant with your state’s landlord-tenant laws. Double check your city’s website to ensure that there are no special laws in your town.

A lease is nothing to mess around with. Make sure it is legal for the tenant but covers your needs as well. There are several clauses that should be in every lease but are not necessarily standard.

3.  Entering a tenant’s unit illegally

Landlords need to enter the tenant’s unit occasionally. However, they cannot enter without reason or without proper notification unless it is an emergency, such as a gas leak. Landlords need to review their state laws to determine what reasons are legal to enter a unit and how much notice the tenant needs. However, make sure to check with your city as well. For example, in Illinois, there is no predetermined notice before entering a unit. However, in Evanston, where my rental property is located, the city had a 48-hour notice rule.

What to do

Research the laws in your property’s location. Landlords should review state laws and the city website where the property is located. There may be local tenant laws that are more restrictive than the state’s laws. Review the lease to ensure that it is compliant with the local tenant laws for entering the property.

4.  Renting an uninhabitable unit

Tenants have cause to sue their landlords if the unit or property is uninhabitable. Units can be considered uninhabitable if there is mold, lead paint, no running water, or no heat in the winter, for example. Tenants have the right to demand that these items be resolved. If they are not, they have the right to withhold rent, move out before the end of the lease, and sue.

What to do

Landlords should complete a thorough, pre-move-in inspection and repair anything that is not working correctly. If a problem arises mid-lease, tenants should immediately contact the landlord to make the repair. Tenants should not be afraid to contact their landlord about such issues. It is important to get them repaired quickly before they become bigger problems.

Nobody wants to be involved in a lawsuit. It is stressful, time-consuming, and expensive whether you win or lose. Landlords need to be fully aware of their legal obligations and communicate with tenants about their rights. If each party is fully aware of the legalities, both parties can avoid a lawsuit and an uncomfortable situation.

How my story ended

When I was sued, the case was dismissed. The judge determined that our tenants damaged the unit beyond normal wear and tear…but it didn’t feel like a win. It felt like a summer spent with negative emotions, hours reviewing our lawsuit materials, and lost time with my kids. If I were to do it over again, I would have had a straightforward conversation with my tenants, explaining their rights and ours. One conversation probably would have saved us all a lot of time and energy.

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