Owning rental property never comes without risks. However, the knowledge of these risks can greatly reduce your exposure to them. With that in mind, we are sharing the top five risks that landlords are faced with today. Here’s the list:
1. Premises Liability
There are lots of things that can happen in and around your property that might cause harm to your tenants and exposure to you. The best thing you can do is investigate any potential liability issues and repair them right away. Before the tenants move in, go through the place and visually identify any potential problems. Look for areas where a person might trip and fall, such as uneven sidewalks. Make sure smoke detectors are operable and check for missing or loose handrails. These are just a few examples. Take a look at everything.
2. Fair Housing Laws
One of the biggest mistakes rental property owner make is violating fair housing laws. Many people don’t even realize they are doing it. You have to understand the laws that are in place and the methods used to enforce them. Make sure you have consistent systems in place that set up how you screen tenants and manage people throughout their tenancies. Get to know federal fair housing laws as well as the requirements in Minnesota and the Minneapolis/St. Paul area.
3. Carbon Monoxide
Carbon monoxide is an invisible, odorless gas that can cause serious health problems to your tenants. In Minnesota, there is a requirement that you have carbon monoxide detectors in your property outside of the bedrooms. This is especially important here, because in Minnesota we close our houses up for the winter and we use fossil fuels to heat them. Always have your heaters inspected and your fireplaces clean, and make sure you install and inspect those detectors.
4. Housing Codes
Local municipalities are getting more and more stringent on rental licensing. This means you have to understand housing codes and keep up with the general property maintenance required by them. Pay attention to any changes and stay up to date.
5. Lead Based Paint
The Lead Based Paint Act and more recently the Renovation Repair Paint Act requires you to disclose lead based paint in homes built before 1978. More importantly, you have to be careful of any work you do in or out of the house that might disturb a lead paint surface. When you do work that affects a six square foot area of interior space or an exterior space of more than 20 square feet, you need to call a specialized and certified repair person who works with lead based paint. If you do not do this, the penalties are extensive.