As a landlord, and potentially a property owner, there’s a lot of liability to worry about. Any number of things can go wrong, from tenant rights to managing finances, that may lead to severe legal ramifications down the road.

To avoid unintended problems, keep these legal tips in mind. Lawyers, CPAs, and realtors weigh in to ensure you’re making the best choices for your property and yourself.

1-3. Don’t Be Naïve

Expert: Denise Supplee, Realtor, and co-founder and operations director of SparkRental

Not being adequately prepared is a big mistake with newbie investors. They purchase the property, place the ad, and rent it out before understanding the various stages and how important each one is.

Don’t skimp on tenant screening: In not being prepared, one of the early mistakes I see is landlords or property managers not conducting thorough tenant screening. This process is not just a simple credit check, it should include contacting the employer, checking out their social media accounts, and making sure the numbers work and your prospect can afford the rent. All the while, make sure that you are adhering to the Fair Housing Laws.

Learn the tenant laws in your state: A second major issue is not taking time to learn the landlord-tenant laws in your state; this is the instruction manual. Would you purchase a new car and not at least glance over the owner’s manual? There are also local regulations including zoning and license and inspections. Glazing over these can end up costing a whole lot of aggravation and money.

4. Set Strict Policies—And Get a Signature

Expert: LawDepot

Your property, your rules. It’s best to be clear with your rental terms before the tenant moves in and make sure they understand what you will and won’t allow in your property. For instance, you might want to set up a zero tolerance policy on having pets or smoking in the suite in order to lessen the potential damage these permissions often cause.

Include these terms in your lease and ask your tenant to initial them as proof of agreement.

Mind Privacy Laws (They Aren’t Always What You Think)

Expert: Kurt Kroeck of RentPost

There are reams of laws and rules about when, why, and how much notice you have to give before you can enter someone’s home, even if it’s a property you own and rent out. However, all too often, landlords and property managers do arrive at a property without prior notice, for inspections, repairs, or even to show the house.

Even small violations like this can be legal validation for a tenant to break the lease but can also end up in court with damages against the offending landlord. It’s always worth the extra effort to know your state’s notice laws, and adhere to them.

Know Eviction Rights and Regulations

Expert: FindLaw

The eviction process is fraught with legal pitfalls. If a landlord evicts a tenant without adequate cause or fails to follow the state’s eviction procedure, he or she could face a lawsuit. That’s why it’s important for landlords to seek legal advice about how to evict a tenant the right way. While hiring an attorney may be prohibitively expensive for some, there are a number of affordable alternative ways to get the legal advice landlords need.

7-9. Don’t Let Finances Cause Unexpected Legal Issues

Expert: Micah Fraim, CPA and award-winning Amazon author

Keep finances separate: If the property is held in an LLC or corporation, but the owner intermingles their spending or uses company funds for personal expenditures, the risk of liability is significantly increased. Now, risk of loss is no longer limited to the LLC/corporation’s assets. Instead, it increases the chances of someone successfully suing the owner on a personal level.

Know if and where funds are tied up: If you end up spending money that should have been held in escrow (like a security deposit), and funds are unavailable to pay the liability later, this can become a significant legal issue.

Stay organized: Like any business venture, forgetting to follow good record keeping can result in incorrect information being reported on tax returns. If the errors are severe enough, the ramifications may not only be monetary, but legal as well.

Advice for Landlords

Keep these legal tips in mind as you venture into property and tenant management. Avoid expensive and tiring legal issues by keeping finances in order, getting to know potential tenants, and knowing the rules, regulations, and laws of your state.

Jessica Thiefels

Jessica Thiefels has been writing for more than ten years and is currently a professional blogger. She’s written for sites like Reader’s Digest, Lifehack, and Retale, sharing tips for saving money every day and becoming more resourceful. 

Posted by Brittany Foster

Brittany is a writer, editor, and content manager interested in law, marketing, and technology. She's been writing for LawDepot since 2014.


  1. That’s a good tip to be clear with your rental terms. Most DIY landlords think that renting their homes out is just collecting rent checks; they don’t realize just how many laws they have to follow in order to avoid getting in serious legal troubles.

  2. Brittany Foster January 22, 2018 at 8:01 am

    Thanks for your comment, Emma. You’re right, it’s very important to understand exactly what becoming a landlord means before trying to rent out a property.

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