The laws governing commercial business, in the recent years, have only been tightened further under the Federal law. The government monitors the activities of all commercial businesses and thus being aware of compliance rules is definitely an advantage.

Here’s a guide to the rules of starting the business of letting-out property on a rental or lease basis.

1.  Using outdated forms

Using forma that either have too many or too few compliance clauses can cause unwanted trouble. For example, the clause on the return of deposit money, if not correct may cause unwanted hassles.

2. Asking offending questions to prospective tenants

If a landlord asks questions that tend to be insulting in any way, the authorities of fair housing may cause trouble. At times, even unintentional questions can cause problems when the applicant is refused accommodation facility.

3. Policies that are discriminatory in nature against families

Some landlords prefer letting out to couples without children since they believe that the nuisance level is lowered considerably. But this may cause problems if the decision is reported to the fair housing authorities.

4. Making promises without any intention of fulfilling the same

If a landlord promises any additional benefits to the prospective tenant during the initial stages, then such commitments have to be met. For example, a tenant may be promised a satellite connection or additional garage space will have to be given just that. If not met, the there is a possibility of legal entanglement which may involve huge costs.

5. In cases where disproportionately heavy late fees are levied

Tenants who delay paying up are charged additional as late fees. But an excessively large late fee can attract the attention of the respective authorities. Any amount that does not correspond to the actual financial loss is not justifiable in the court of law.

6. Invading on the tenant’s privacy

In case the landlord invades the privacy of the tenant frequently or even if he makes one major mistake that demeans the tenant, it can lead to court ordering payment for damages.

7. Using security deposits for purposes other than repairs of damages by tenants

The security deposit is usable only in case of repair work for damages caused by the carelessness of the tenant. But if it is used for making cosmetic enhancements to the property or for furnishing purchases, then the tenant may file a case against the landlord.

8. If the property is not maintained and possesses some hazard

A hazardous property violates the basic requirements set by the local and state authorities along with violation of the landlord-tenant relation. If the tenant has had to make repairs to the property using own funds then such amount can be deducted from the rent and a complaint to the authorities can cause further problems. Any criminal activities on the property can lead to many more problems.

9. Withholding security deposits when the lease is broken

The security deposits need to be returned to the tenant even though the lease may be broken before the specified time. The amount required to recover the rent can be kept but keeping the deposit and renting the property at the same time is definitely not legal.

10. Not returning security deposits as per the law

As per the law, landlords have to return the security deposit, either the entire amount or the balance after the repairs. There is time limit within which the landlord has to furnish the details of how the security deposit was put to use.

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