Even Cumberland County residents who rent a property or two as a side business should understand that by doing so, they increase their risk of getting sued.
Often, disgruntled tenants may sue to protect themselves from eviction or from having to pay what they owe in rent and damages. Likewise, a tenant may counterclaim if the landlord files suit to evict the tenant or collect money from them.
However, landlords may also face legal claims from neighboring property owners, the landlords’ lenders and even from people who get hurt on their rental property. New Jersey landlords may also wind up in an administrative dispute with state or local authorities.
While this list is not exhaustive, here are some steps landlords can take to reduce the likelihood that they will have to deal with a costly, time-consuming and, potentially, financially devastating lawsuit:
- They should make sure that their leases protect their interests, are clear and are enforceable under New Jersey law. On a related note, they need to have processes in place to ensure the lease gets consistently enforced in practice.
- They need to make sure they are respecting their tenants’ legal rights and following all steps that New Jersey law requires of landlords, including requirements pertaining to security deposits.
- In principle, it is acceptable for a residential landlord to vet their would-be tenants to make sure that the landlord is comfortable doing business with them. However, they must also make sure they are following federal, state and local fair housing laws.
- Landlords should secure proper liability coverage in case of injuries on their property. While they can also make it a requirement that their tenant carry liability protection, the landlord should ensure their premises is safe and have a plan in case of any unexpected serious injuries.
- Especially as a person’s rental business grows, they may face many business law issues, as well as issues related to lending and government regulation. If a landlord hires even one employee, it raises additional legal issues related to employment law. They should consider having regular contact with an experienced attorney.
Even with preparation, not all lawsuits are preventable
Even with the best prevention efforts, no New Jersey landlord is completely untouchable by a lawsuit.
Should a landlord receive a lawsuit or even a credible threat of one, they should make sure they understand their legal options and formulate a strategy to protect their interests.