Rental agreements are legally binding contractual “agreements” between two parties, the landlord and tenant. That said, landlords should be aware that while many laws are protecting the rights of property owners, tenants also have rights. These tenant rights protect renters against overbearing or illegal landlord actions. Therefore, understanding the reasons tenants sue landlords and how to avoid potential problems is vital. Below we look at the top landlord-tenant issues that escalate to a lawsuit.
What is a Wrongful Eviction?
Statistics show that landlords are more than 90% successful in winning a lawful eviction. However, wrongful convictions are a different story entirely. Landlords can rightfully seek to evict a tenant from their rental property for non-payment of rent, failing to move out at the end of a lease term, or breach of any lease provisions. The truth is there are many instances when a landlord is in full compliance when it comes to evicting a problem tenant.
That said, it is essential to understand that evicting a tenant is a legal process and must be followed to prevent a tenant from suing for wrongful eviction. Check out these instances of wrongful eviction where a tenant may hold legal grounds to sue for costs and damages in a court of law:
Common Types of Wrongful Evictions
- Retaliatory Eviction
- Not Following State Eviction Procedures
- Privacy Violations or Harassment
Taking possession of your rental property, increasing rent, or decreasing a provided service (such as utilities) to a tenant who meets any of the following criteria, constitutes potential landlord retaliation, and a tenant can sue:
- Tenants who file a complaint with the Government Authority
- A renter who is involved in a Tenant’s Organization
- Someone who has filed a lawsuit against the landlord for an unrelated issue
- A resident who has notified the landlord about potential lead hazards in the property (including the notification that a child with elevated lead blood levels resides at the property)
Not Following State Eviction Procedures
There is paperwork to file and specific guidelines to follow when it comes to proper eviction proceedings. You cannot merely kick your tenant out on the street, regardless of whether your reasons for eviction are valid. If you wrongfully evict a tenant from your rental property, they can sue you for incurred damages related to the eviction, court costs, attorney fees, and much more. Therefore, you do not have the authority to do any of the following without a proper court order:
- Move any of your tenant’s belongings out of your rental property
- Change the locks
- Cut off utilities to the home
Breach of Quiet Enjoyment
According to most state laws, unless your rental property lease agreement specifies otherwise, there is an implied covenant or warranty built into every lease. Simply put, this entitles the tenant “quiet enjoyment” of the premises while leasing the home.
Meaning that tenants are guaranteed the right to live in peace without privacy violations or harassment from the landlord. Should you breach your tenant’s right to quiet enjoyment of the premises, and your tenant feels compelled to leave the property, you may be held responsible for all expenses related to this “constructive eviction.”
If you commit any of the following types of behaviors towards your tenants, you may find yourself facing a court summons:
What is Considered Harassment by Landlord?
- Interruption of utilities such as electricity or water.
- Improper entry into your property.
- Letting others into the residence without due notice or consent.
- Violation of rights via gossip.
- Showing up at a tenant’s workplace to discuss landlord/tenant-related issues.
What are the Penalties of Wrongful Eviction?
If a tenant feels wrongfully evicted, they have the option to take you to court. If the landlord did not follow the proper legal eviction proceedings from the start, they might have a case, and you may have to pay up! Additionally, a resident can also file civil claims against a landlord that could include trespassing, assault, battery, and other offenses.
Evictions can be expensive; in fact, statistics show they can cost upwards of $3,000 to $5,000. That said, a wrongful eviction could have you paying out for the following to your tenant:
- Legal Fees
- Court Costs
- Damages – Up to 3x the actual damages or 3x the monthly rent
- Punitive Damages – depending on your state regulations.
- Return of the Entire Security Deposit
- Jail Time – In states such as New Jersey, a landlord engaging in self-help evictions is a “disorderly person.” This is a criminal offense that subjects the landlord to up to six months in jail.
Can a Tenant Sue Over a Livability Issue?
Yes! All states, except for Arkansas, allow tenants to rightfully sue their landlord if they provide an uninhabitable residence. Specifically, Maryland law dictates that all lease agreements have a statement guaranteeing the tenant a home that is reasonably safe and inhabitable condition. There are certain inconveniences that tenants want a landlord to address quickly, such as cosmetic defects or small maintenance repairs. However, fixing these issues comes down to good customer service, but they are not considered unlivable circumstances. Therefore, only in the below-mentioned scenarios should you become concerned about a tenant rightfully suing you and winning compensation.
What is Considered Unlivable Condition?
- Lack of heat, light, electricity, or water (not due to the tenant’s failure to pay).
- Lack of sewage disposal.
- Severe rodent infestation.
- Lead paint hazards not appropriately addressed by the landlord according to state law.
- Structural defects are posing a severe threat to your tenants’ physical safety.
- Any condition posing severe health or fire risk.
What are Tenant’s Consumer Report Rights?
If you are a landlord, violating the Federal Fair Credit Reporting Act legislation could mean serious court time, should your tenant decide to take legal action. Commonly used to screen potential tenants for your rental property, consumer reports also matter during eviction proceedings. It is crucial to note the many violations that can occur while utilizing a tenant’s consumer report to not violate any of their rights:
- Not reporting tenants to the credit bureau.
- Denying an application for unwarranted reasons that may later affect the tenant’s ability to lease a home elsewhere.
- Requiring a co-signer when unnecessary.
- Filing unnecessary or wrongful eviction actions.
- Failure to send appropriate rejection letters outlining the reason for application denial.
- Requiring a higher deposit amount than is standard for other applicants.
Becoming familiar with all federal credit reporting laws is an essential step for all landlords hoping to avoid being sued by their tenants.
Suing Over a Security Deposit Dispute
One of the most contended disputes between a landlord and tenant in the housing court system concern security deposits. While this is standard procedure for almost all rental agreements, there is much to be said about security deposit best practices. If the landlord fails to return the deposit in time, a tenant has the right to sue for up to 3x the withheld monetary amount plus reasonable court fees. To avoid finding yourself battling it out in court, follow these simple steps:
How to Avoid Security Deposit Disputes?
- Charge the Right Amount: Charge your tenant the proper amount for the security deposit based on the market and your property specifics. In most places, the most you can charge is up to 2 months’ rent. You might think that undercharging will help you rent out your property more quickly, but it might just end up attracting a financially unstable tenant.
- Conduct Move-In Inspections: Require every tenant to inspect the property upfront and have the tenant mark the condition of each detail as they walk through, and have them sign and date the document and turn it into you directly.
- Keep Accounts Separate: Instead of simply depositing the money in your regular bank account, set up a specific account for deposits, and put the money there. That way, there is no confusion about where the money is, and you won’t accidentally use it.
- Perform Move Out Inspections: During the move-out inspection, thoroughly look over the property and take plenty of pictures of any damages caused by the tenant. These are items that could allow you to deduct an amount from their security deposit.
- Know the Laws: Typically, a landlord has a specified amount of time after move out, usually 30 to 45 days, in which to return the security deposit. Additionally, some laws govern how tenants receive notice of charges against the deposit as well as required receipts.
- Save Your Receipts: When you need to deduct from a security deposit, make sure you document every repair/cleaning transaction by keeping the receipts. These receipts will show the amount(s) you can deduct and gives you clear proof of the money spent to get your property back in good condition. This is vital in ensuring your tenant cannot dispute the charges later.
What is Maryland Law Regarding Security Deposits?
- The landlord must provide the tenant with a written receipt for the security deposit. Any landlord who fails to do this is liable for punitive fees.
- Landlords should keep the security deposit money in a federally insured financial institution and must deposit it within 30 days after receiving it.
- When a tenant’s lease is up, the landlord must return the security deposit to the tenant within 45 days (minus any portion of the deposit that the landlord may rightfully keep due to damages or excessive filth beyond “wear and tear”). Otherwise, the landlord could be required to pay the tenant three times the held amount plus attorney’s fees.
Best Ways to Avoid a Lawsuit as a Landlord
When your business is a rental property, there are many risks involved, one of which is lawsuits. While no one can predict what a tenant will do, there are some steps you, as a landlord, can take to prevent issues from arising.
- Provide Safe and Habitable Housing: It is your legal responsibility to provide housing that is both safe and inhabitable condition. When your rental does not meet standards of cleanliness or repair, your risk of getting sued dramatically increases. Ultimately, it is your responsibility to comply with any federal, state, and local housing codes to ensure your property is in rentable condition.
- Address Maintenance Quickly: When tenants have an issue that you refuse to fix, you are opening yourself up to problems. Depending on the severity of the repair, a tenant may legally be able to withhold rent or even sue. Remember, your rental property is an investment, and repairs are inevitable. Address maintenance issues promptly and use qualified repairman.
- Follow the Lease: A lease is a contract that binds both parties. If you do not hold up your end of the agreement, you could get sued. Therefore, it is vital to know and understand each lease provision and stick to it.
- Properly Handle Major Concerns: Environmental hazards, such as asbestos, lead-based paint, or mold, need proper treatment. Never try to cover up these issues; instead, react with disclosure and fast action. This will be the key to avoiding potential lawsuits.
Does Landlord Insurance Protect Against Lawsuits?
Landlord insurance protects many aspects of your investment property. The standard landlord insurance protects the dwelling and any additional structures, plus provides liability coverage. However, a standard policy typically will not cover wrongful eviction. Also, companies typically do not cover any violation of the lease on the part of the landlord. While some companies will offer added protection for additional fees, the best defense against lawsuits is your actions.
Are you looking to avoid any of the above situations with your tenants? Bay Property Management Group has offices providing 24/7 support for property management services in Baltimore and throughout Maryland, Southern Pennsylvania, and Washington DC. Our staff stays well-versed on all federal and state laws regarding eviction proceedings and security deposits. Offering years of experience drafting legally compliant lease agreements, we understand the balance between a tenant’s right to a peaceful place to live and your peace of mind.
So, don’t stress about facing your tenants in court. Bay Property Management Group has the necessary resources to avoid disputes and the experience to guide you if a tenant decides to sue.