PROPERTYSPARK ARTICLE

7 Legal Essentials Every Real Estate Agent Should Know About Tenant-Occupied Properties

Some Legal Essentials Worth Knowing

The Lease Agreements

The law created in lease agreements a binding contract where lessees’ and lessors’ actions and responsibilities are to be guided and where compliance is ordained by law.

As a real estate agent, you may need to understand the tenant and owner’s side of the contract, especially their security, like property insurance.

Along the way, you may also need to know what renters insurance cover and other contracts the tenant may have had relative to their rented premises. You may need this info in cases of disputes regarding the property’s sale and other owner-lessor issues.

And, before listing or managing a tenant-occupied property, it’s more advantageous if you can review their existing lease agreement, especially:

• Lease Duration and Their Terms
• Rights of Renewal
• Transfer Clauses

Your competent knowledge of these lease provisions can help you manage the expectations of all parties involved and help them avoid breaches of contract.


The Tenant’s Rights During Sale

Apart from reserving a chunk of your budget for marketing, it will boost your expertise as a property broker if you also spend time and resources to research tenants’ rights during the sale of the property, especially those according to your state’s laws, like:

• Right to Notice
• Right to Occupy
• Right of First Refusal

In some instances, tenants are given the first opportunity or priority to buy the property if the owner decides to sell. Knowing these tenant rights and all other provisions about real estate can help you avoid and prevent legal issues and maintain smooth transactions, sales, and client relationships.


Eviction Laws and Procedures

Many delicate legal matters, like evictions, are couched with strict guidelines as to how they need to be traversed with care. That’s why, as a real estate agent, you have to be quite informed about:

Just Cause Eviction Requirements

You may need to understand when and why a tenant can be legally evicted.


Notice Periods

Many states require specific notice periods, like 30 to 60 days, before you can initiate eviction procedures.


Court Proceedings

If eviction issues reach the court, there are specifically detailed steps that you may need to observe and follow, like jurisdictional requirements.


Distinctions Between Landlord and Tenant Responsibilities

Most state laws have enumerations of ordinances that contain clear distinctions between landlord and tenant responsibilities, like maintenance, repairs, and insurance coverage. That’s why, as their able agent, you need to know what are the:

• Landlord or Lessor Responsibilities
• Tenant or Lessee Responsibilities

Your understanding of the boundaries, especially those in their lease contract, can help you address potential buyer concerns and set the right expectations.


Handling of the Property’s Security Deposit

Since security deposits are regulated by law, mishandling them can lead to legal disputes and consequences. So, as the real estate agent-in-charge, you need to make sure that:

• There’s Proper Collection and Holding
• There’s Timely Return
• There’s Transparency in Deductions Made

You need to make sure that everything about the property’s security deposit is laid down on the table. It’s one of the rental concerns that’s quite crucial to maintaining legal compliance and protecting your client’s or the landlord’s interests.


Compliance with Fair Housing Ordinances

It’s a well-built edict that discrimination due to race, color, religion, sex, familial status, or even disability is prohibited by law, especially the Fair Housing statutes.

So, in your dealings with tenant-occupied properties, you need to make sure that:

• Non-discriminatory practices are observed
• There are reasonable accommodations within the property

Otherwise, you may face significant penalties and damage to your professional reputation if you’re charged with violating the fair housing laws.


Disclosure Requirements

You need to be fully transparent when selling tenant-occupied properties and honestly disclose:

Existing Leases

Your possible buyers need to be fully informed about ongoing lease agreements and their associated terms.


Tenant Issues

You need to clearly disclose to prospective buyers, especially those known issues with tenants, like late payments or disputes.


Property Condition

It’s best to disclose property defects or their need for repairs, especially if they affect tenant safety.

Your failure to disclose these essential concerns can lead to serious legal consequences, like court action from buyers or tenants.