Landlord-tenant law is complex and varies from state to state. Even though the law is complicated, there are several ways to avoid getting sued by tenants. If you own a rental property, you need to know what you can and cannot do in order to avoid getting sued.
In this blog, we’ll go over the most common reasons why landlords get sued by their tenants.
1. Unenforceable or Illegal Clauses in a Rental Lease
A lease agreement is a binding contract between the landlord and the tenant. As a landlord, this lease will be the first place you turn if there are any disputes, disagreements, or conflicts during the lease period, so you need to be sure it’s legal and binding. At times, landlords make the mistake of writing into their lease agreements certain provisions that are void or unenforceable. Some examples would be a clause requiring tenants to pay for all damages to a rental unit, regardless of whether or not they are responsible, or a clause prohibiting all animals (including service animals).
How to Avoid Getting Sued: For starters, make sure you’re using a lease that’s valid and enforceable in Arizona. It should reference laws and requirements that are specific to the state. A lot of landlords make the mistake of downloading a lease template or using a sample that isn’t state-specific. You want to make sure your lease will hold up in Arizona courtrooms if necessary. Our previous blog, “What to Include in a Proper Phoenix Rental Agreement,” lists down several important elements that absolutely must be included in your lease.
Also, if you’re not working with a professional Phoenix property management company, we recommend that you contact an attorney before you draft and sign a lease.
2. Mismanagement of the Security Deposit
Arizona law is pretty straightforward when it comes to security deposits; there are limits to how much you can collect as well as timelines for returning the deposit at the end of a tenancy. Your tenants can file a lawsuit against you if you have not refunded their security deposit or are wrongfully withholding a portion of it.
How to Avoid Getting Sued: Legally, landlords are permitted to charge the deposit for damage as well as any cleaning fees, unpaid rent, or overdue utilities. They are not allowed to charge for wear and tear. As a Phoenix landlord, you should understand the distinction between damage and normal wear and tear and make sure your lease states exactly how you expect to find the property returned to you after the tenancy.
Note that under Arizona law, a landlord is given 14 business days to return the security deposit with an accounting of what was withheld.
3. Housing Discrimination
There are seven protected classes, and rather than listing what those are, we’ll let you know that almost everyone who walks in and ultimately becomes a tenant can fall into one of those categories. For instance, getting a broken appliance repaired quickly for one tenant while making another tenant wait could be perceived as a fair housing issue.
How to Avoid Getting Sued: It is difficult to stress how important it is to follow Fair Housing laws. Non-compliance with these laws can lead to a lawsuit that eats up the equity in your property. If a Fair Housing complaint is filed, HUD reaches out to you to determine if the complaint is valid.
A civil penalty can be $6,000 to $100,000. You may also be charged for punitive and non-economic damages. The best way to protect your company financially and legally is by complying with Fair Housing laws. Treat everybody equally and consistently. During application, have a fair and consistent process. Later, during the tenancy, you have to continue treating everyone equally. When it comes to maintenance, you don’t want to favor one tenant over another.
4. Illegally Entering a Tenants' Property
The Landlord-Tenant Act includes many rules about tenant and landlord rights, including the right to Quiet Enjoyment. To put it simply, a tenant has the right to be left alone. The tenant’s right to a peaceful and undisturbed enjoyment of the property prevents a landlord from entering the property without good cause.
How to Avoid Getting Sued: When entering a property, you should keep the following in mind.
Notify your tenants in writing when you’re coming over. The notice must be sent at least 48 hours in advance, with allowances for mailing time if sending via mail. Gain permission verbally as well.
Property owners should be considerate about making appointment times and avoid changing appointment times at the last minute.
When the landlord is in the unit, they should avoid touching anything.
The tenant has certain rights to the property through their lease, so landlords should treat them with respect.
You should enter the unit with caution if there are unaccompanied minors.
Property owners should never just show up at a property to check on things or overuse their access rights. Additionally, property owners should not rearrange drawers or look through the tenant’s personal belongings.
5. Maintenance & Health Issues
Landlords are required to disclose any known, existing, or previous lead paint hazards/mold issues at the property. Moreover, a tenant may file a lawsuit against you if you do not keep the property in a safe, habitable state. For example, your AC is not working in the summer, the only toilet won’t flush, or you do not have running water.
How to Avoid Getting Sued: Don't wait for minor and more affordable problems to turn into larger, more expensive catastrophes. When your residents report a maintenance issue or request a repair, take care of it right away. A leak that’s ignored for weeks or months is going to turn into a plumbing disaster and may result in rot and mold as well. Deferred and unreported maintenance can cause a lot of damage to your property and your relationship with your tenants, so take care of things promptly and thoroughly.
Preventative maintenance can also protect you against property damage. Schedule annual inspections for your air conditioner, water heater, and roof.
A dedicated Phoenix property management company will be able to help you navigate the intricacies of the industry, keep a positive relationship with your tenants, and help you steer clear of avoidable consequences.
Call us today at Service Star Realty.
Service Star Realty
2929 East Camelback Road #119, Phoenix, AZ 85016
(480) 426-9696
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