Landlord Lawsuit Prevention - How To Avoid Litigation
By: Kevin Kiene
Why can't we all just get along? Because greed is part of human nature, and where there is greed, there will be someone who would rather make a quick buck through an easy lawsuit than actually create something of value.
Enter: landlord lawsuits, bane of our existence, and serial in nature since everyone just loves to hate landlords, under the false assumption that all landlords are miserly and rich. There are ways to minimize the incidence of these lawsuits, however, without offshore accounts or complex legal ownership structures.
Landlord Lawsuit Prevention Strategy 1: Lead-Based Paint
You can't win a lead-based paint lawsuit. Say it with me: "I can't win a lead-based paint lawsuit." The tenants kid has a friend over, and it happens the friend has lead poisoning, they can sue you and win. The tenants shove lead-based paint chips in their own kid's mouth (don't laugh it happens), they sue you and win. With me here? It is impossible for a landlord to win a lead paint lawsuit.
That's the bad news. The good news is that there are ways to minimize the likelihood of one occurring in the first place. First of all, you MUST comply with all lead-based paint laws in your state. This probably means a lead paint inspection in between every tenant, and providing a series of lead-based paint disclosures to the tenants when they sign the lease agreement. I can tell you right now that families who like to sue prefer the easiest targets: landlords who don't follow lead-based paint laws to the letter. By showing fastidious attention to detail, you can send a strong message.
A final note: health problems from lead-based paint occur when very young children ingest the paint chips. This means that, if you have an applicant with children under six years old, you should take extra precautions to check their legal history and see if they've ever been involved in a lawsuit (particularly a lead-based paint lawsuit). Beware of serial litigators; they'll take you for all you're worth, and then some.
Landlord Lawsuit Prevention Strategy 2: Mold
I'm sorry, but toxic mold as a national health hazard is a myth. Yeah, yeah, yeah, I know toxic mold can make people sick, but genuine cases of toxic mold sickness are EXTREMELY rare.
Now for the bad news: it doesn't matter that it's not a common risk, because the public believes the fear-mongering campaigns that the media has used to score ratings. This means that you can be sued for toxic mold poisoning, and you'll probably lose.
So what can you do? Prevention, prevention, prevention, starting with choosing rental properties to purchase. Look for any evidence of water infiltration, or leaky pipes or ducts. Be aware of any water problems in the property before buying it, and make sure you correct them before signing a lease agreement. You should also consider having a mold inspection performed prior to signing the lease agreement, by a licensed toxic mold remediation firm. When you do sign the lease agreement, make sure to add a clause into it that tenants are responsible for informing the landlord or property management company immediately if they notice any signs of mold growth, to put some of the responsibility back on the tenants.
Landlord Lawsuit Prevention Strategy 3: Make It Personal
If you take nothing else away from this article, take this away: tenants are far less likely to sue landlords that they know personally. You ever hear people say "Hell, they don't have to like you" WRONG! They do have to like you, because who wants to sue someone that helps them fix their resume, or sends them Christmas cards every year? Time spent getting to know your tenants on a personal basis is time well invested, and is both the easiest and most effective method of preventing landlord lawsuits.
Being an absentee landlord is a guaranteed way to find yourself in the middle of a lawsuit. Instead, be proactive, show some initiative, because with a little effort you can prevent lawsuits before they even occur to your tenants.
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