Nowadays, in any industry, it can feel like people are quick to throw the "sue" card at you for any minor issue if they feel like things aren't going their way. This problem becomes much worse when that person is living on your property.
After many years in the property management industry, we get it. Dealing with a lawsuit is a major anxiety for landlords of residential tenants. Your biggest concern is keeping good tenants in your properties, avoiding the bad ones, and maintaining positive tenant relations.
But the reality is that landlord-tenant issues happen and sometimes, they reach the court system. But why do tenants sue landlords? And how can you avoid it?
Here at Advantage Property Management Services, we're not legal experts. But we are property management experts and have helped our owners deal with and overcome these issues. That's why we put together this article on why landlords get sued and how you can avoid it.
Understanding Landlord-Tenant Law
The first and most important thing for you to do is to familiarize yourself with California landlord-tenant law. Landlord-tenant law doesn't just concern tenant rights, it also grants you as a landlord certain rights. These laws also outline the legal responsibilities of both parties in rental agreements.
We put together this guide on recent changes to California state laws to get you started.
What Does the Legal Process Look Like?
The legal process for landlords and tenants looks much the same as other civil court proceedings. They typically begin with a demand letter or written notice to the landlord or their attorney. This typically outlines the tenant's complaints and seeks a resolution.
If the tenant doesn't feel this notice is resolved, the situation can proceed forward in a few ways:
- Small claims court
- Civil lawsuits
- Settling out of court through both parties' attorneys
No matter how small the legal issue may be, you have a legal right to a lawyer and should consult with one for any legal issues.
The Reasons Tenants Sue
So what leads tenants to sue landlords and how can you take steps to minimize it? Here are the most common reasons we have seen in our time managing for rental housing.
1. Housing Discrimination & California's Fair Housing Act
Housing discrimination is typically a claim that will be made against landlords by people who aren't even a tenant yet. It comes most often from applicants denied during the rental application process.
This type of dispute can stem from the Fair Housing Act. This core federal law is intended to protect tenants from being discriminated against based on race, color, religion, national origin, sex, disability, and familial status.
California also has 19+ protected classes that come from California’s Fair Employment and Housing Act. This law is unique to the state and provides further discrimination protection for rental applicants beyond the federal protections.
Discriminating against any of these can lead to the landlord being prosecuted, as California emphasizes this. Some of these classes include:
- Source of Income (includes applicants who receive government assistance such as Section 8)
- Gender Identity
- Immigration Status
- Citizenship
- Sexual Orientation
If a person seeking tenancy feels they have been denied the ability to rent a property for one of these reasons, they can bring it to court.
How to Avoid
Even if you're fully obeying California landlord-tenant law, denied applicants can still accuse you of this. It's an unfortunate reality that sometimes, people are going to come after you just because they didn't get the rental they wanted. However, the landlord's rights include the ability to screen and deny applicants within the confines of the law.
The best way to defend yourself is to have a thorough knowledge of screening laws and apply them to your screening criteria. Make sure your tenant screening process is uniform and applied in the same way to every applicant. Records of this can give you a solid defense against discrimination.
To accomplish this, you must have written screening criteria and apply them uniformly. Not only is it difficult to accomplish consistency in your screening criteria without having it documented, but it also makes it much harder to prove in court that you treat every applicant the same.
2. Security Deposit Issues
According to Advantage Property Management Services owner Russ Cowley, "The most common lawsuit we face is a small claims case over security deposit deductions."
After all, security deposits can be a touchy subject at move-out time. If a tenant feels that deductions were made that weren't fair to them, their first thought can be taking it to court to get their money back.
How to Avoid
Just like when defending against discrimination claims, landlords or property managers have to be thorough with their practices. With security deposits, this comes in two forms: lease agreement practices and property assessments.
When preparing a lease agreement, make sure your clauses concerning the security deposit are clearly communicated and within the confines of the law. This will ensure that the agreement holds up in court.
Develop thorough documentation practices as well that outline the conditions of the property. Documentation should be done when the tenant moves into and out of your rental to legitimize deductions from security deposits.
3. Habitability Claims
One of the most important tenant rights a landlord must uphold is keeping a habitable property for the tenant. Otherwise, the tenant can sue for this. This can happen at any time of the lease but is most often done when a tenant moves out or is evicted.
According to Russ, "When a landlord files an eviction, the standard tenant response is to countersue for habitability issues. It's the classic argument that the tenant should get a discount because their dryer didn't work for a week. This can encompass many other issues. For example, a Landlord failed to properly maintain something (trees, plumbing, electrical, appliances, etc) and something bad happened that damaged the tenant's personal property."
How to Avoid
Similar to security deposits, you must be consistent with your documentation of property condition. This includes your response time and resolutions for maintenance problems during the lease
You or your property manager must also be quick to solve maintenance issues to avoid habitability claims. If the renter has a convenient method to contact you for maintenance and the issues are resolved in a timely matter, there's less likelihood of running into a legitimate claim.
4. Eviction Disputes
The sensitivity of evictions lends itself to tenants seeking legal action. Wrongful evictions are when a tenant sues because they were evicted without proper cause or without following correct legal procedures.
Retaliatory evictions are when a tenant sues because they were evicted in retaliation for exercising their legal rights. This can include making claims for habitability or joining a non-profit organization for tenants' rights.
How to Avoid
Evictions are the most sensitive issue you can deal with in your rental. The landlord and tenant don't want to be put through it. But if you have to evict, there are certain rules you have to follow. Make sure when you evict a tenant, your eviction process is meticulous and follows all California legal guidelines.
5. Breach of Quiet Enjoyment
Tenants' rights include the ability to peacefully use and enjoy their rental unit. This can be infringed upon by excessive noise, harassment, or other privacy violations.
This can include the landlord entering a property without providing proper notice. Landlords can easily make this mistake with things like entering for a property assessment or just checking on a maintenance issue.
How to Avoid
Thorough communication for any maintenance work that causes noise is key here. As is a property manager who can resolve tenant disputes and avoid them snowballing to legal action.
As for entering a unit, make sure you have proper cause and are always giving a 24-hour notice before entering occupied rental housing.
Proactive Defense for Rental Properties
Landlord-tenant disputes aren't uncommon, but they can be avoided or defended against with the proper preparation and practices in place. For the best defense, hire a property manager like Advantage Property Management Services.
Far too many property managers simply act as a receptionist or "co-manager." With Advantage Property Management Services, you get a true full-service team that handles every aspect of property management so you can focus on growing your investments. We deal with sensitive issues like unpaid rent or eviction proceedings competently so you can rest easy.
Explore our services to learn more or get a free rental analysis for your property.
