At the risk of understatement, complying with rental property laws is not optional. Failing to follow the rules can quickly lead to financial or legal problems, as anyone in the rental industry is well aware.
The challenge property managers and owners face, however, is keeping up with these ever-changing rental property laws and knowing what exactly they need to be doing. These laws are frequently altered or updated at federal, state and local levels to reflect current affairs.
The eviction protection measures introduced during the COVID-19 pandemic are a clear example of how quickly rental laws can change, but it’s far from the only type of tenant protection subject to sudden changes or updates.
Property managers and owners need to be aware of a range of legal requirements and regulations around rent control, rental applications, tenant screening and security deposits, as just a few examples. We’ll look at the most common types of rental property laws subject to change and the easiest way to stay up-to-date.
Key Federal Rental Property Laws
Landlord-tenant laws are always changing and can vary from location to location. That said, there are two major federal regulations that affect all property managers and owners.
You are likely familiar with these two laws, but to recap:
The Fair Housing Act prohibits any discrimination based on race, color, national origin, religion, sex, familial status or disability. This includes leasing, as well as setting rental terms and advertising the property.
Likewise, the Fair Credit Reporting Act controls how a tenant’s credit history is used – property managers or landlords must get consent to run a credit check, communicate which reporting agency is running the check and let the tenant know if their application is denied because of the report.
Both these laws have been in effect for decades and are infrequently updated. They form the basis for other state or local rental property laws, which evolve more regularly and thus require more intentional effort to stay up-to-date.
Other Important Rental Property Laws
Beyond federal law, there are also statewide tenant protections that impact property owners and managers. There may also be local laws set by cities or counties.
If a property manager or landlord fails to follow required landlord-tenant statutes, the renter has the right to file a complaint or take legal action. So, it's important to be up-to-date with landlord-tenant law.
Evictions & Terminations
Eviction moratoriums introduced during COVID-19 are some of the most talked-about in recent times because of how quickly the restrictions took effect and the significant impact on many rental property owners.
While the federally-mandated hold on evictions has now expired, there are still local laws governing how a landlord or property manager, can terminate a tenancy. This includes limitations on the reasons for evicting a tenant as well as required notices and communication.
Rent Control
Rent control limits the amount a property owner, or manager, can charge in a lease. It caps the amount that rent can be increased – usually a percentage of the gross rate or a set percentage plus inflation – as well as how often the rent can be raised.
It’s usually set at a state level, although cities and counties can also enact their own more restrictive rent control laws. Rent control is not standardized across the country and, in fact, more than 30 states have laws that prevent local governments from enacting rent control measures.
Required Landlord Disclosures
There is specific information that you’re required to disclose when renting out a property. This can vary from one location to the next, but may include:
Details about security deposits, fees and how to pay rent
Shared utility arrangements
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Presence of any environmental or health hazards, from lead-based paint to bed bugs
Registered sexual offender databases
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Known locations of former federal or state ordnance locations in the area
Future intent to demolish the unit
Recent death on the premises
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Identity and contact information of the landlord and property manager
Rental Applications & Tenant Screenings
In addition to the Fair Housing Act and Fair Credit Reporting Act, there are often local laws governing rental applications and tenant screenings.
For example, many states have limitations on non-refundable application fees. Some counties and cities prohibit certain types of questions on applications – like asking about criminal history or running a criminal background check. Other areas allow rental property owners to deny an application based on the person’s criminal history, as long as they comply with federal laws.
Late Fees and Rent Collection
Rules around rent-related issues such as late or bounced checks, late fees and grace periods for non-payment or rent can all vary by location.
For example, most states limit the amount that can be charged for late rent payments – either in terms of a maximum dollar amount or a percentage of the rent. Some also restrict how soon late fees can apply, ranging from the day rent was due to up to a week late.
Security Deposits
Almost all states across the country, in addition to many cities and municipalities, have rules regarding security deposits.
This includes regulations about how much can be collected, how the deposit is held and when it has to be returned to the tenant. In some cases, the rental property owner must pay interest on a security deposit.
How To Keep On Top Rental Property Law Updates
Rental property laws like these evolve frequently to reflect current political, economic or social issues.
As just few recent examples:
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The City of San Diego extended the regulations for the no-fault termination of tenancy, increasing the required notice period, until the end of September 2022.
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Ohio passed legislation blocking local governments from banning or directly regulating short-term rentals.
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New York continues to debate “Good Cause” legislation that restricts no-cause evictions and certain rent hikes to non-rent stabilized apartments, after the proposed bill failed to pass in the most recent legislative session.
How do you keep on top of all these updates and changes?
The easiest way is to receive trusted real-time legislative updates that cover all and any changes related to rental properties. No more surprises or missing key information that you, and your property owner clients, need to know to remain legally compliant.
With Steady’s Owner Benefit Package, that’s exactly what you get: immediate, actionable information that keeps you up to date on everything you need to know.
The package, available to property managers partnered with Steady, includes legislative updates in real-time sent directly to your inbox. Other benefits of the package include quarterly market and asset reports, as well as innovative solutions to protect your clients against non-payment of rent.
Interested in learning more about the value-added services that come with partnering with Steady? Contact us today.