If you are a property owner and landlord, you likely know that there are certain terms and specific components that your lease agreement should contain, like your name, where to send the rent check, who pays the utilities, and other important information. What you may not be aware of are the many disclosures required by federal, state, and local law.
A disclosure is information relevant to the property itself and any known hazards that are required to be shared with tenants. This includes informing tenants of their legal rights and of the landlord’s expectations of them.
Whatever you do as a landlord, and whatever specific information you need to include in your lease agreement to meet your individual personal needs, you must make certain that the lease you offer your potential tenants complies with all federal disclosure requirements as well as the requirements of your state and municipality. If you fail to provide the disclosures that are required by law, you subject yourself to hefty fines, possible tenant lawsuits, and, in some cases, even criminal charges.
It is also important to note that a disclosure may not be sufficient. In some situations, you may also be required to make repairs. For example, you cannot just inform tenants that the heater does not work—you also must fix the heater.
For any structure built before 1978, landlords must warn tenants that there may be a health hazard due to the use of lead paint. The Environmental Protection Agency (EPA) has some specific requirements for lead paint disclosures that apply to every landlord in every state.
There are some exceptions to the rule, and a lead paint disclosure is not required for any of the following:
Some states may go a step further and, in addition to requiring the disclosure form and pamphlet, require tenants to sign a document verifying they have been informed of the possibility of lead paint.
The following states do not require any disclosures:
If you are a landlord in one of these states, do not forget that you must still comply with the federally mandated lead paint disclosure. Also, make certain you check with your local ordinances to see if your city requires any specific disclosures unique to your area.
There are some common landlord disclosures generally required by most states.
Penalties for noncompliance vary. Some violations result in a simple “Notice of Noncompliance” from the enforcing agency, which gives the landlord an opportunity to correct the violation. Some violations subject the landlord to high fines, and others may actually result in criminal charges.
For example, according to the federal mandate for the disclosure of lead paint, the penalty for the failure to disclose is a fine of up to $16,773 for each violation. In addition, if a landlord is found liable for a tenant’s damages from lead, and the landlord failed to disclose the possibility of lead paint, the landlord will have to pay three times (treble damages) the amount of damages suffered by the tenant.
Many state statutes that require certain disclosures have penalties written in to them. For example, New York requires a disclosure if a rental property contains “impermissibly high levels of VOC (volatile organic compounds).” A landlord who violates this requirement faces jail time and a hefty fine.
Nevada requires, as do many states, landlords to notify tenants if the rental property is in foreclosure. A landlord’s failure to make this disclosure is a misdemeanor, and the landlord may be charged with “deceptive trade practices.” This offense subjects the landlord to a hefty fine and liability for any actual damages suffered by the tenant.
Some statutes allow a tenant to collect actual damages, which are the amount of loss suffered by the tenant due to the nondisclosure. Others provide for treble damages.