Do you own some land in Houston with a separate, detached livable unit you’d like to rent out? If you’re considering renting to a tenant who will share your land, but not your home, there are several things you need to know.
Renting out a separate, livable unit on your land is a good way to bring in extra income, but it comes with a set of special rules to follow.
1. Don’t forget to clearly spell out your tenant’s area in the lease
When your tenant lives on the same land as you, the lines that separate personal space from communal areas can get blurry. The best way to clarify your tenant’s space is to get an aerial photo from Google (or use your own drone) and draw a line around their space with a sharpie marker. Make some copies and attach a copy to the lease.
If you have any storage on the property that is shared, be sure to include that in the lease as well. Be specific with how much space your tenant is allowed to use and which side of the storage shed is theirs.
For example, if you give them half of the storage shed, indicate in the lease whether you’re giving them the right half or left half. These details will matter if you end up in court.
2. Avoid arguments over service animals and disabilities
This should go without saying, but it needs to be said. Avoid engaging in any kind of argument with your tenant over service animals, emotional support animals, and disabilities. Arguments involving these subjects tend to get heated quickly. However, you’ll probably need to discuss some of these issues at some point.
Here are some tips for managing these interactions:
- Contact an attorney before denying a request for a reasonable accommodation. Before denying a request for any reason, check with your attorney to see if you’re exempt under the Fair Housing Act. For example, if your tenant is renting a single-family home and you’re not using an agent or property manager, and you don’t own more than three homes, you’re exempt.
While it’s morally right to approve reasonable accommodation requests that will help your tenant enjoy their home, exempt landlords aren’t legally obligated to approve those requests.
If the Federal Fair Housing laws apply to you, think before you reject a request. If you won’t grant your tenant’s request, consider alternative options and present those options to your tenant in writing. However, don’t get involved in an argument. If you become argumentative, your tenant could use your demeanor against you in court.
- Service animals that misbehave. If your tenant has a service animal that is misbehaving, approach the situation respectfully. Call your tenant and have a personal conversation with them. Tell them you’re concerned about their animal’s behavior and explain why it’s a problem.
For instance, if their service dog chases the neighborhood kids while off-leash, let your tenant know they need to maintain control over their dog at all times. Kids are small and easy to knock over. Even if the dog just wants to play, small kids can get seriously hurt.
Let your tenant know that if they can’t control their dog with their voice, they need to find an alternative method, like a leash. A leash isn’t required if your tenant can maintain control with their voice, but if a tenant doesn’t have voice control over their service animal, they need to use some kind of physical device, like a leash.
Just like with any dog owner, asking a disabled tenant to control their service animal can create tension. People generally don’t like to be told how to manage their pets. However, service animals are required to be under the handler’s control at all times, so it’s not unfair to make that request.
Hopefully, your tenant will be aware of their responsibilities as a service dog handler and will do their best to gain control of their animal.
- Emotional support animals that misbehave. Although emotional support animals aren’t service animals, they have the same rights as service animals in a housing situation. However, owners are required to keep their ESA under control at all times.
If your tenant has an ESA that misbehaves, depending on the severity of the behavior, you can request that your tenant gain control over their animal. For instance, if their ESA starts fights with your dogs, you can prohibit free roaming on your property. If your tenant’s area isn’t fenced in, you can require your tenant to contain their ESA on the property with a leash or zipline.
Many disabled individuals get defensive, understandably, when they feel their rights are being violated. If you’re exempt from the Fair Housing Act, and you deny a request for an accommodation, you need to be ready to de-escalate by not arguing.
By avoiding arguments over service animals and disabilities, you’ll eliminate one of the biggest sources of potential tension between you and your tenant. People with disabilities experience extensive discrimination, and it’s not always intentional. If you make the effort to de-escalate and empathize with your tenant, you’ll have a better chance of creating a resolution.
3. Don’t cover utilities in the rent
If your tenant can’t get electricity on a separate meter in their name, don’t include utilities in the rent. You can’t predict when a tenant will abuse their access to “free” electricity and make your bill sky high.
In Houston, Texas, your tenant will be running the air conditioner in the summer and the heater in the winter. There’s no way around that. The amount of electricity they use will fluctuate based on the weather, which makes it hard to pinpoint a fair value to place on their utility usage.
The main issue is that tenants who don’t have to pay for their actual electricity usage won’t pay attention to how much electricity they use. They’ll leave heaters running all night long and even when they leave the house.
If you must include electricity and other utilities in the lease, set a specific limit and require the tenant to pay any extra. Don’t leave this clause out of your lease because your tenant might fight you on this and win, even if they overused their fair share.
4. Avoid trying to do everything yourself
The worst mistake Houston landlords make is trying to do everything alone. Whether you rent one property or ten, whether you’ve been a landlord for a month or ten years, hiring a property manager will be a huge relief.
At Green Residential, we help Houston landlords manage their investment properties and keep their tenants happy. If you’d rather not get involved in the nitty-gritty of being a landlord, contact us today to see how we can help.