Things to Think About Before Becoming a Landlord
Thinking of investing in some property? Certainly, rental income can be a good way to make some extra money. But there are also legal issues that every landlord encounters. Your ability to anticipate and handle those problems can be the difference between making money, or sinking financially.
Here are some things to think about before you become a landlord
Avoid Renting to Friends and Relatives
This isn’t so much legal advice, as it is life advice. Although practically, if there is a dispute, it will be much harder to start legal action or evict a family member. So in some ways, your legal avenues will be affected. Remember that your rental is the way you make your living. Treat your tenant kindly and professionally, but remember that a tenant should not be a friend or family member, if you can avoid it.
Before COVID, most landlords thought that maybe if a tenant didn’t pay, as long as the landlord had a few months worth of savings, the landlord could evict the tenant, re-rent, and survive. Then COVID hit, and landlords were faced with months and months of tenants who could not pay, and laws that would not allow landlords to start eviction proceedings. Many were not prepared to go so long without rental income, and lost properties or suffered financially.
We don’t know when the next COVID will be- some crisis, panic, or government order, that makes evictions difficult. Or, a tenant that puts up a particularly nasty and long drawn out fight, leaving you without rental income for an extended period. Make sure that you can go for many months without rent if you absolutely had to, as a “safety net.”
Have a Written Lease – and Stick to It
In many cases, landlords will do things that they don’t have to do under the lease, or allow a tenant to do things that they’re not allowed to under the lease. That’s OK, and flexibility is good business—however, you should always
(1) have a waiver provision in the lease, making it clear that excusing the tenant from some obligation once, isn’t permanently modifying your lease, and
(2) make sure that you put any alterations or agreements in writing, with language confirming that the lease, as written, continues to be in effect.
Understand Security Deposits
There are complex laws that say what a landlord can do with a security deposit, where the deposit must be held, and when and how a security deposit can be held back (not returned to the tenant). The security deposit is not the landlord’s personal stash of money, which can be held or paid back to the tenant at will. And don’t depend on language in form, online landlord tenant agreements—that language may not be modeled after Florida’s security deposit laws.
Call the West Plalm Beach landlord-tenant litigation lawyers at Pike & Lustig for help with any real estate or rental law disputes that you may have.