As a real estate investor, it is essential to stay up-to-date with local and national housing laws. With the property market constantly changing and evolving and a huge push towards tenant protections growing, staying informed on legal matters can prevent costly mistakes and protect your investment.
Let’s talk first about why it’s so important that you understand the laws, and then we’ll highlight a few key laws that are especially complicated for many landlords and investors. You don’t want to get caught in the consequences of being unaware of what’s required of you.
Why Does It Matter?
Housing laws are always changing and they probably seem fairly obvious if you haven’t spent any time really diving into fair housing, security deposits, and a tenant’s right to privacy.
Rental laws are actually pretty complex and nuanced. Here’s why it matters that you know them:
- Knowledge is Power in Avoiding Legal Penalties
One of the most crucial reasons for staying informed on housing laws is to avoid legal penalties. Being unaware of local or statewide requirements could result in serious and expensive legal mistakes. It doesn’t matter if “you didn’t know” and it doesn’t matter if the mistake was unintentional. You’re still accountable to the law, so keeping up-to-date with changes in laws will help you avoid any costly mistakes and legal fines.
- Compliance Protects Your Investment
Understanding housing laws will help you better protect your investment. Owners who understand the rights of tenants will be more likely to attract good tenants. You’ll provide a property that’s safe, habitable, and attractive to potential residents. Keeping a home habitable by legal standards will reduce your need for emergency repairs and loss of rent. Ultimately, it’s critical to know the local and national laws that apply to your property or portfolio in order to provide a rental home that’s successful on the market.
- Understand the Laws that Impact What You Earn
Security deposits, pet fees, and late rent fees all impact what you earn. So, you need to know the laws and restrictions that surround them. To maximize your rental income, it’s paramount to stay informed regarding housing laws. There’s no rent control in Kansas City, but your lease does need to state how much rent is and how it’s expected to be paid. You’ll need to know how often it’s acceptable to raise the rent. You need to understand local tenant protection laws and safe housing standards so you can avoid lawsuits and claims, which will be expensive and hurt what you earn. This knowledge can positively impact your rental revenue in the long run.
- Legal Understanding Means You’re Keeping Up With the Latest Housing Trends
Housing laws change frequently, affected by economic, societal, and political circumstances. By staying in the loop and updated on the latest housing developments, including tax incentives and tenant protections, you will have a competitive edge over other owners who may be slowed down by trying to understand what they can and cannot do.
What Laws are Especially Important in the Kansas City Rental Market?
When it comes to understanding the laws as a rental property owner, the most important federal laws you need to know are the Fair Housing Act and the Americans with Disabilities Act. On a state and local level, it’s important you understand security deposit laws and habitability standards.
- Fair Housing Laws and Kansas City Rentals
The federal Fair Housing Law protects the following classes of people against discrimination in rental housing. You cannot discriminate or deny housing based on race, skin color, religion, national origin, sex, physical or mental disability, or familial status.
- Service and Support Animals
Service and support animals are also protected by fair housing. This is often a tricky area for landlords to navigate. If a tenant or an applicant has a service animal, you are required to allow that animal in your property – even if you don’t allow pets. You cannot charge a pet fee, a pet deposit, or pet rent on a service animal or an emotional support animal.
- Security Deposits in Kansas City
Under Missouri law, you are not permitted to charge more than the equivalent of two months of rent as a security deposit and in Kansas, only one month of rent with restrictions on pet deposits. If you don’t know this law, you could charge more, which would be a violation. At the end of the lease term, when your tenant moves out, you have 30 days to return the security deposit with an itemized list of damages for which any portion of the deposit is kept. Not following this timeline can lead to a court action or a claim made by your tenant. Make sure you know what you can and cannot deduct. Unpaid rent and tenant damage are good reasons to withhold some or all of the deposit. But, you cannot keep any of the tenant’s money to repair wear and tear items at the property.
Understanding the laws and remaining informed and updated on the latest housing laws demonstrates that you are committed to your role as a landlord. It also shows that you’re a more professional and trustworthy investor. By being knowledgeable and involved, you show your tenants and investors that you are more than just profiting from them, but you also care about the legal and ethical conduct of your business.
We know it’s not always easy to stay updated on what’s happening legally. You’re busy running your rental business and tending to other parts of your life. However, keeping up-to-date with local and national housing laws is essential. It can help you avoid legal penalties, protect your real estate investment, maximize your rental income, be aware of the latest housing trends, and maintain professionalism. Understanding housing laws is fundamental for a successful real estate career. Stay informed, and you will gain a competitive edge and better position yourself as a trustworthy and knowledgeable investor.
If you cannot find the time or resources to keep up with legal changes, it’s time to talk with a local property manager. We can help. Please contact us at Key Partners Property Management. We’re your best Kansas City property management resource.
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