5 Things New Landlords Don’t Know About Managing Houston Rental Properties

Managing a rental property in Houston isn’t easy; you’ve got plenty to learn. You need to be well versed in landlord-tenant law, the Fair Housing Act, the Americans with Disabilities Act, and many other federal, state, and local regulations.

For example, Nolo.com explains that under Texas law, landlords are required to disclose certain information in the lease. This includes the names people who are authorized to act on the landlord’s behalf and legal recourse a tenant can has when a landlord fails to make necessary repairs in a timely manner.

If you’re a new Houston landlord, you might be wondering what you should brush up on first. Here are the top landlord-tenant laws commonly misunderstood by new landlords:

1. Companion animals aren’t pets

Companion animals are a point of confusion for many landlords, including long-time landlords. Most landlords understand the laws governing service animals, but mistakenly treat companion animals as pets.

Companion animals, also called emotional support animals, have the same rights as service animals in a rental unit. Even with a no pets policy, a tenant with an emotional support animal cannot be denied housing. However, unlike service animals, companion animals need to be certified. An animal’s certification won’t necessarily include details about the tenant’s disability and it’s illegal to ask about the nature of their disability.

Tenants can only be charged fees for pets

The Fair Housing Act exempts both service animals and emotional support animals from any kind of pet-related fees including pet deposits and pet rent.

If you’re a new landlord and you have an applicant with a certified companion animal, you must make reasonable changes to your pet policies to afford the tenant equal opportunity to use and enjoy the rental unit.

2. Tenants notice when a landlord breaks their word

A lease agreement is supposed to be a two-way agreement between a landlord and a tenant. Both parties are responsible for meeting their respective agreements. However, some tenants are used to lease agreements being weighted in favor of the landlord and have a hard time coping when a landlord breaks their part of the agreement.

For example, some landlords agree to pay for a parking pass and then fail to keep the pass current. Most tenants don’t find out until their car is towed or ticketed.

Some landlords tend to get too comfortable with a lease agreement and forget about their obligations to the tenant. Tenants notice when a landlord doesn’t honor their word. If you’re a new landlord, don’t let tenant parking passes expire and don’t start charging late fees too soon.

Aside from the lease agreement, show up to make repairs and perform maintenance on time. Respect your tenants enough to be timely. You may not realize how hard it is for some people to arrange a day to be home.

Honor all of your agreements no matter how small. Those agreements may not be small to your tenants.

3. Making exceptions for low credit scores is a bad idea

As a new landlord, making exceptions for people with a low credit score may have crossed your mind. Don’t let this idea become a reality. An applicant with a credit score of 629 and below is usually someone who doesn’t pay their bills at all or on time. A low credit score can also be a sign that a person is carrying more debt than they can handle.

While some people prioritize rent payments, not everyone will. You can’t know in advance what kind of priorities a person with a low credit score might have. You may not be their top priority.

Aim for tenants with a credit score of at least 650 to improve your chances of getting paid on time. If you have a choice, tenants with a credit score of 720 and above are ideal.

Certainly, there will be times when even good tenants are late with the rent, but they’ll pay you the rent plus late fees as soon as possible. Tenants who don’t pay their bills are likely to not pay rent at all and force you to go through an official eviction process to get them out.

4. Security deposits are never non-refundable

Sometimes new landlords are confused about the laws that govern security deposits based on personal experience with former landlords. They may have encountered a landlord who either kept their security deposit for no reason or tried to use it to cover charges outside the scope of what a security deposit can legally cover.

If you’re a new landlord, be aware of the difference between a non-refundable fee and a refundable security deposit. A non-refundable fee is money the landlord keeps no matter what. Common non-refundable fees include move-in fees and cleaning fees.

A security deposit can never be deemed non-refundable. A landlord can’t keep any portion of a security deposit unless the tenant causes damage beyond normal wear and tear. When a landlord needs to use a portion of the security deposit to pay for repairs, they must refund the unused remainder of the deposit. The landlord must also provide copies of receipts and an itemized list of repairs that includes the name of the business or contractor that performed each repair.

Even though a landlord might use a portion (or all) of a security deposit to pay for damages when a tenant moves out, tenants have the right to be refunded their full deposit.

5. You don’t owe tenants a grace period for late rent

Many tenants are under the impression that landlords are required to provide a grace period for late rent. That only applies when it’s written into the lease. Although it’s common practice, Houston landlords aren’t required to give tenants extra time to pay the rent. The rent is due when the lease says the rent is due. If a tenant tries to convince you otherwise, refer them to your lease agreement for a final answer.

This also applies when the rent due date lands on a holiday or weekend. You’re not obligated to give tenants extra time to pay the rent just because the banks are closed. For tenants who pay in cash and need to wait for their paycheck to pay rent, this might be a problem. However, most tenants who pay rent by check shouldn’t have any problems writing a check on a Sunday if that’s when rent is due.

If you feel like allowing tenants a grace period, write it into your lease to make it official. If you feel like dropping late fees, use your discretion and don’t let tenants take advantage of you.

Are you overwhelmed with all the information you need to know?

Being a landlord in Houston can be overwhelming when you’re just learning the ropes. At Green Residential, we can make life easier for you by taking over your landlord duties so you can go back to investing and generating income.

Our property management experts are well versed in Texas landlord-tenant law and all the local laws pertaining to the Houston area so your properties (and tenants) are always in good hands. Contact us today to see how we can help.