It is a lucrative venture to invest in real estate but there are some legal risks that comes with owning investment properties. You have to understand these risks and how to overcome these so that you can mitigate risks in an effective manner.
There are companies that specialise in asset protection and come up with strategies tailored to your situation. They will look into common legal issues that you will face as a property owner. One such issue is problematic tenants. This will be tenants that are refusing or failing to pay rent, engage in illegal activities or cause damage to your property. All of these things can lead to legal and financial trouble. This is why it is so important to carry out a comprehensive background check on the tenants. This should include their rental history, credit history and criminal records. You can contact their previous landlords to verify whether their rent history is accurate and whether they have anything to say about the tenant’s behaviours. Make sure to ask the tenant for references for this. You will also need to verify their income so that you can choose tenants that have a stable income and can afford the rent. There has to be well drafted lease agreement so that both parties understand their rights and responsibilities. This is a great way to prevent disputes or misunderstandings.
You can have a qualified attorney review the lease agreement
So that you know it complies with local, federal and state laws. You can also include specific clauses when it comes to maintenance of the property, paying rent and what the consequences of violating the lease will be. It is also a good idea to update the lease agreement from time to time so that it can reflect changes in property rules or laws. Depending on your municipality and state, the laws regarding landlords and tenants can change from time to time. You need to stay informed about this so that you can comply with the updated laws. There are workshops, seminars and webinars that you can attend for these. You can also consult with a real estate attorney so that you can stay updated on any changes that affect your properties. There are landlord associations that you can join so that you can access resources and updates on relevant laws and regulations.
There are legal issues stemming from the failure to maintain property.
This is made even more complicated if a visitor or tenant is injured as a result of your negligence. When you carry out regular maintenance, accidents can be prevented and you can make sure the property is in good condition as well. There has to be regular inspections so that you can identify maintenance issues and take measures to address them. There has to be a routine maintenance schedule for critical systems in the building like electrical, plumbing and HVAC systems. You also need to hire licensed professionals to carry out the repairs and maintenance work at the property so that you can be assured that the work is done in a correct and safe manner.
