Monday, 10 September 2012

Understand your rights and obligations as a landlord

After you have purchased your property and have rented it to suitable tenants you need to make sure that you understand your rights and obligations as a landlord.  This is one of the core things that you probably will not know intuitively and so need to go out and seek the information.

There are several general things that you need to be aware of when it comes to landlords rights and obligations including
  1. Rights and obligations vary across jurisdictions
    • Make sure you understand your rights and obligations in each jurisdiction. 
    • Understanding your position in your jurisdiction is not helpful if you invest in a property in another state or country
  2. Not knowing the law is no excuse for not conforming with the law
    • Another common way of saying this is 'ignorance of the law is no defence to a breach of law'. 
    • If you do not know a rule exists and inadvertently do something you can still be liable for penalties even if you did not mean to breach the rules
  3. Things always go wrong eventually
    • There are some things that you can control for but others that you have absolutely no control over
    • Things will always go wrong so make sure you understand what your rights and obligations are in each situation
What are the types of rules and regulations you need to understand

To list all of the rules and regulations would be a bit pointless as not all rules and regulations exist in each jurisdiction and more importantly I would not want to miss important ones that you may need.  The list below, therefore is an indication only of things you need to understand when renting an investment property
  • Tenancy agreements - what they must contain and what they govern
  • Rent in advance, deposits, charges, bonds
  • Paying rent
  • Water expenses
  • Obligations on the tenant on the way in which the property must be kept
  • Inspections and rights of entry
  • Sub letting the property
  • Rent increases
  • Rights around end of tenancy and when either party can end the lease and on what notice
  • Evictions
  • Rights and obligations and avenues for appeal relating to tenancies
Where can I get the relevant information

Most jurisdictions have large tracts of legislation that cover these issues and as time goes by you should probably spend some time getting to know this area of law (after all you have hundreds of thousands of dollars invested - you probably understand your day job much better and have less money invested there!)

However, if you have read legislation at all in the past you know that it is often written in a way that is hard to read and often seems relatively ambiguous. 

The best source of information is typically on consumer affairs type websites and are typically written for tenants.
  • This isn't a problem though as a tenants right is your obligation and their obligation is your right so you are reading it in reverse
  • This is the best place to start as it is often written very very simply and will give you a feel for what you need to do in any given situation
  • I suggest googling "landlord's rights and obligations for [xxxxx state]" and seeing what comes up
    • You should get something like this site which covers the law for Victoria in Australia and gives a breakdown of everything you could possibly want to know
Laws change so make sure you keep on top of the information

Laws are changing all the time.  Make sure you keep on top of any changes to the renting laws in your state or jurisdiction so that you are not caught unawares when something goes wrong.

This area seems like a lot to learn when you are first starting out but it isn't that bad actually.  It is very rare for something to go wrong in the first couple of months so that gives you a fair amount of time to learn your basic rights and obligations.  As time goes on you can get into the nitty gritty so that you are aware of everything you need to know.

You May Also Be Interested In:
Investing in real estate - All topics
What should you do AFTER you have bought and leased your investment property
Investing in real estate with family and friends
Investing in real estate: Essential record keeping
Investing in real estate: What insurance should you have?

1 comment:

  1. Now I know the rights of my landlord I wont let my landlord abuse me. Thanks for this article it really helps me a lot!

    information for landlords