Top 10 Mistakes Made by Landlords

Owning residential rental property can be a great investment. As Mark Twain is quoted as saying: “Buy land, they’re not making it anymore.” While rental property can be a huge blessing and great investment, there are common mistakes that can make the process expensive, frustrating, and, in the end, a bad investment. Here are the top 10 mistakes made by residential landlords:

No More Month-to-Month Tenancies

In Oregon, if a tenant has been in a rental property for twelve months — whether on a month-to-month lease or otherwise — the tenant cannot be evicted “without cause.” That means, unless the tenant is in breach of the lease (for example, failure to pay rent), the property is being sold, the property needs major renovations, and a few other very specific exceptions, a landlord cannot terminate the lease and evict the tenant.

Not Having Written Lease Agreements

Written leases are critical! Verbal agreements leave room for misunderstandings and disputes. A written lease helps clarify rights and responsibilities for both parties.

Ignoring Rent Control and Tenant Protection Laws

Not complying with state and local ordinances regarding rent control, eviction procedures, or tenant rights can result in significant and detrimental legal consequences. In Oregon, rent increases are capped by statute. A landlord cannot raise the rent above the statutory amount. Additionally, in some jurisdictions a landlord may be required to provide a specific sum of money to a residential tenant if the landlord terminates the lease.

Illegal Entry or Privacy Violations

Entering a rental property (or even coming to the front door of the rental property) without proper notice or otherwise violating tenant privacy rights can lead to legal action by tenants and significant penalties for landlords.

Mismanagement of Evictions

Eviction laws provide very specific requirements. Failure to address even minor issues can often require a court to reject the eviction and award fees and costs to the tenant the landlord is trying to evict. Mishandling the eviction process, such as illegal eviction or failure to follow legal procedures, can result in lawsuits for wrongful eviction, damages, and fees awarded to the tenant.

Failure to Screen Tenants Properly (and Legally)

Not conducting thorough background and credit checks can lead to problematic tenants who may not pay rent on time or cause property damage. But be careful: Oregon law (state, county, and/or municipal) prohibits landlords from considering certain aspects of a prospective tenant’s background in denying them the rental property.

Improper Handling of Security Deposits

Failure to properly document and handle security deposits can result in legal disputes and financial penalties. Oregon law provides very specific requirements on how to handle and refund security deposits.

Ignoring Maintenance and Repairs

Neglecting necessary repairs can lead to legal liabilities, tenant disputes, and potential code violations. Oregon law provides for basic habitability requirements. Failure to meet these can lead to loss of rent and damages owed to the tenant.

Failure to Maintain Adequate Insurance Coverage

Insufficient insurance coverage can leave landlords vulnerable to financial losses in case of property damage, accidents, or lawsuits.

Poor Record-Keeping

Inadequate documentation of communications, repairs, rent payments, and other transactions can complicate legal disputes and weaken the landlord’s position in court.

Each of these mistakes can have serious legal consequences and cost the landlord significant sums of money in lost rent, damages, and even penalties, so it’s crucial for landlords to stay informed about their legal obligations and seek professional advice.

If you are a landlord and need assistance or advice on these or related issues, we can help.

The information provided in this article does not, and is not intended to, constitute legal advice; instead, all information and content in this article is for general informational purposes only.