It pays to know what you are doing

Novice landlords

December 11, 2005|By LYNN MARIE HONEYWILL | LYNN MARIE HONEYWILL,SPECIAL TO THE SUN

Tom Shaner is dumbfounded by the frequent phone calls his association receives from new landlords asking for advice - after the landlords have already leased their property to tenants.

"They should not go into it blind," said Shaner, executive director of the Property Owners Association of Greater Baltimore, a nonprofit trade association with a membership tending toward owners of single-family houses.

"You don't just have a sideline investment. You're going into the business of providing housing. You need to know the laws of your business," Shaner said. Here are some of the highlights of what prospective landlords need to know.

Leases and housing laws

A lease is a legal agreement that lays out the terms of the rental and the rights and responsibilities of the landlord and tenant.

"The lease will be the operable document if you end up in court," said Bob Merbury, a former certified property manager and a residential and commercial landlord with properties in Baltimore and surrounding counties.

The lease stipulates the rent, the security deposit, who pays for utilities and maintenance, and whether a tenant can sublet the premises. One landlord omitted a subletting clause, only to be hit with repair bills and little recourse for reimbursement when a college student tenant sublet to another student who damaged the place, Shaner said.

Leases also say what happens if the property is sold or if the tenant falls behind on rent.

Any lease, however, is subject to federal, state and local laws. For instance, although Maryland law requires that landlords give a 30-day written notice to terminate a tenant's month-to-month lease, Baltimore City requires a 60-day written notice.

Not knowing those laws can result in a landlord being unable to evict a tenant for not paying rent, because he didn't correctly file the court action or give the tenant appropriate notice, said Stephanie Cornish, senior landlord-tenants counselor for Baltimore Neighborhoods Inc., a nonprofit citizens' group.

"The law says what they [landlords] can and cannot do," Cornish said. "I think they all need to find some way to find out what the law is, because they waste a lot of money and time going through the process and not knowing what they're doing and so not being successful at it."

Lead paint

It's particularly imperative for landlords to observe state and federal laws pertaining to lead-paint contamination in homes to avoid government penalties and limit liability in civil lawsuits.

In Maryland landlords can't evict tenants for not paying rent without demonstrating in Rent Court that they are in compliance with lead-paint laws.

The federal law applies to all rental properties built before 1978. It requires that landlords disclose any known lead-paint hazards to potential tenants and also distribute to new tenants the pamphlet "Protect Your Family From Lead In Your Home."

Maryland's 1994 lead-paint law applies to all rentals built before 1950, unless they have been certified as lead-paint free. To comply with the state law, landlords must register all pre-1950 rental properties with the Maryland Department of the Environment and distribute to tenants an additional pamphlet, "Lead Poisoning Prevention - Notice of Tenants' Rights."

Before each new tenancy, Maryland landlords should follow a specific protocol for lead-paint testing or lead-paint risk reduction treatments for a rental unit.

Depending on the condition of a rental property, landlords can generally expect to pay $800 to $2,500 for lead-paint risk reduction treatments per housing unit, estimated Alvin Bowles, manager of the Department of the Environment's lead-poisoning prevention program. Risk-reduction treatments need only be performed once, followed up by a visual inspection by a certified inspector each time a rental is turned over, Bowles said.

Lead-paint testing costs $170 to $350 depending on the individual inspector and the size and condition of a home, contractors said. But the lead dust-test must be performed every time the unit is leased, Bowles said.

Landlords must only use state-certified contractors and inspectors for lead-reduction and testing work or risk a $25,000 fine, Bowles said.

A milestone in the Maryland lead-paint law, known as the 100 Percent Rule, takes effect in February, along with stepped-up enforcement of the lead-paint law, Bowles said. Landlords will have to demonstrate that every rental unit they own, rather than just half, has been tested for lead paint or undergone risk-reduction treatments.

Discrimination

Landlords should also familiarize themselves with federal and state housing laws against housing discrimination. Federal law prohibits discrimination based on a renter's race, color, religion, national origin, family status or disability.

State housing law further bars discrimination against rental applicants because of marital status or sexual orientation.

Tenant screening

Finding the right tenant can be a challenge. Some landlords depend on credit and reference checks.

Merbury recommends as extensive a background check as possible on prospective tenants, including credit checks and calling previous landlords.

Although Baltimore County landlord Dave Lombardo follows such screening procedures, he mostly relies on his intuition. "You just have to get a feel for it," said Lombardo, who has been a landlord for eight years. "Finding tenants isn't hard. Finding one that you like is the problem."

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