While there are some landlords out there who make a career out of being a landlord, most folks who rent out properties do so because it’s a lucrative form of investment. They own one or a few rental properties and are largely self-educated when it comes to the legal side of the business. In other words, they don’t necessarily keep a lawyer on retainer to answer simple everyday questions. It wouldn’t necessarily be cost-effective to do so.
For those landlords, the question of hiring an attorney is always one of cost versus benefit. Attorneys are expensive, but in certain instances, they can save you thousands of dollars and expedite unpleasant processes. So the question for most landlords becomes: when exactly should I hire an attorney?
Eviction is a nuclear option. Not only is the tenant being forcibly removed from the premises, but the eviction will stay on their record for the next seven years. Judges will require a high standard of misconduct committed by the tenant. While eviction lawsuits are expedited, the rules governing eviction lawsuits are strict.
Landlords who have experienced an eviction in the past have a better chance of successfully evicting a tenant. Still, unless you’re a lawyer, there are always going to be unforeseen wrenches thrown into the works. Even if you are a lawyer there may be unforeseen wrenches. Lawyers, of course, are better at anticipating and managing them. Hence, why they’re useful.
If this is the first time that you’ve ever been forced into the position of evicting a tenant, then having a lawyer guide you through the process can make a huge difference. In addition, there are some complex evictions in which even experienced landlords would want to have a lawyer help them. Those include:
The penalties for engaging in illegal housing discrimination are steep. Not only will a landlord potentially face a $16,000 decision, but they can likewise owe other damages to the plaintiff. If it’s HUD or some other agency that’s doing the investigating, it’s a good time to consult a lawyer in order to make sure that your bases are covered.
Worse still, is the likelihood that this information will become a matter of public record and be talked about in the news. Not only would a landlord face damages, but discriminatory practices could potentially damage their reputation in the community. This could, in turn, create problems for their business.
A lawyer will help a landlord manage the process as quickly as possible to avoid it blowing up in the press.
Be sure to check out our article, Housing Discrimination Complaints: What Landlords Need to Know.
There are a number of reasons that a landlord can be sued, but one of the most common is a failure to maintain a safe and healthy residence. Tenants can bring premises liability lawsuits if they result in personal injury. In most cases, the tenant will need to be able to show that they attempted to contact the landlord and resolve the issue through some form of communication. For instance, if a damaged railing results in an injury to a resident, they would have to inform the landlord that there was an issue in the first place.
The question that underlies all personal injury lawsuits is the role of negligence. The courts will hold a landlord liable when they knew or should have known about a potential safety problem. Negligence can be inferred circumstantially when a landlord’s responsibilities include certain routine maintenance, or the safety problem was a routine event that could have been foreseen. Otherwise, the tenant needs to explicitly make the landlord aware of the issue. Only if the landlord fails to respond could they then be held liable for injuries that occur on their premises.
Nonetheless, personal injury lawsuits are complex issues and having a lawyer handle them for you will produce the best results.
If a landlord’s failure to maintain his property results in damage to the tenant’s property, the tenant has a right to sue the landlord for damages. Some landlords require that their tenants carry renters insurance which may cover property damage to tenant’s belongings done on the premises.
Most landlords carry some form of liability insurance that protects them against potential injuries or property damage caused by their properties. Insurance companies will generally provide a lawyer on your behalf to settle the damages. Insurance companies may, however, not be willing to cover damages when the negligence is obvious or gross, or it violates one of the terms of your policy. At that point, you would need a lawyer.
Landlords that own major investments all over the city or make a living off of real estate generally have an attorney on retainer or are themselves, attorneys. For smaller investors, having an attorney on retainer may not make a whole lot of financial sense. There are nonetheless a number of problems that befall landlords in which having an attorney can save them thousands of dollars. In other words, they’re worth the cost.
Protecting your investment means successfully navigating these tricky situations. Defending yourself, in many situations, simply isn’t an option.
You may also want to see our article, How Landlords Protect Themselves From Lawsuits.
Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.
Ready to know more than your attorney? You'll get over two hours of instruction combined with five ebooks to teach you how to best structure your real estate investments.
Join thousands of real estate investors in all 50 states as they enjoy exclusive content, special promotions, and behind-the-scenes access to me and my guests. No spam, ever. Just great stuff!