Easily the worst part of being a landlord is being a serial defendant against frivolous lawsuits. Everyone just loooooves to sue landlords, under the (usually false) assumption that landlords are all rich miserly bastards that are robbing the working man blind.
However, there are a few cheap and easy ways to drastically reduce their chances of being sued, and no, I’m not talking about tangled legal ownerships or offshore accounts.
Lawsuit Prevention Tip 1: Lead-Based Paint Laws
Repeat after me: “Landlords can’t win lead-based paint lawsuits.” Your tenant feeds their kid lead paint chips from somewhere else, and sues you, you lose. Your tenant’s kids have their friends over, and the friend has lead paint poisoning, and the friend’s parents sue you, you lose. Are you getting this? YOU WILL ALWAYS LOSE.
So first of all, get a lead paint certificate between each tenancy (probably required by your state anyway). Second, deliver all of the proper lead-based paint disclosures to your tenants when the sign the lease, which will send a message to them that you’re serious about lead paint and that you’re on top of things, which will discourage a frivolous lawsuit. Third, pay CLOSE attention when screening tenants to families with children under six. They’re a liability, so check their health history if you can, and DEFINITELY check to see if the parents have a history of litigation (every time someone is involved in the court system, it goes on public record).
Wrong Kind of Mold?
Lawsuit Prevention Tip 2: Mold
The myth of toxic mold is bogus. Yes, it exists, but genuine cases of toxic mold poisoning from a rental property are extremely rare.
That’s the good news; the bad news is that it doesn’t matter, because you can still be sued for it, and you’ll probably lose. That means that a tenant gets sick (doesn’t matter what kind of sick), and they see a spot or two of mold, they can sue you and win, which means you have to take mold VERY serious, even though it’s not a serious health threat.
So, before buying a potential rental property, carefully look it over for any traces of mold OR water leaks. If you’re renovating, pay extra attention to duct and plumbing joints, as these are common leak spots. Before renting your property out, you should also have a mold inspection done, and you should definitely write a clause into your rental agreement requiring the tenant to notify the landlord immediately if they notice mold. This will help put some of the responsibility back on them, and (hopefully) make them think twice before suing over mold.
Lawsuit Prevention Tip 3: Keep It Personal
This is by far the most important thing you can do to prevent lawsuits: MAKE SURE YOUR TENANTS LIKE YOU! Establish a personal relationship with each one of them: be on a first name basis, ask about their kids, tell them about your troubles at work, etc. If they’ve tasted your homemade cupcakes, they’ll be reluctant to sue you. But, if you’re just some vague figure that occasionally calls up haranguing them with “Where’s my money!?” and “Pay me or I’ll evict your ass!” they’re going to think of you as the Man and will do whatever they can to put one over on you.
The bottom line with this entire tirade is that you can’t afford to be an absentee landlord. Show a little initiative, be proactive, and you can prevent the overwhelming majority of lawsuits before they ever star