Owning a rental property is a sound investment that could earn a landlord a tidy sum. However, it comes with many responsibilities that owners should be aware of before starting a rental business. Being a landlord requires time, effort, and legal compliance in equal measures.
Rental businesses face federal, state, and local regulations prohibiting certain behaviors and actions and enforcing others. While most laws remain the same throughout America, some states and local municipalities have additional requirements. Here are some primary regulations landlords need to know about:
According to Tennessee law, a landlord owning any rental property must obtain a business license. This includes furnishing state authorities with the property owner’s personal details, the addresses of rental properties, and information about agents acting on their behalf. Companies managing rentals in Chattanooga, including Evernest, Chattanooga Property Management, and Mountain View Property Management, must employ agents with valid real estate broker’s licenses, as must larger corporations like Greystar Real Estate Partners, LLC. and the Lincoln Property Co. Evernest is a growing residential rental property management company in Tennessee, with offices in Chattanooga, Memphis, Nashville, and Murfreesboro. It also operates in Colorado, Ohio, and Michigan. Evernest’s stellar record comes from its continuous efforts to hire agents that provide top-quality service to its clients.
Property agents in Tennessee must do due diligence and ensure that their clients have registered their rental businesses. A failure to do so could get the property management company into legal hot water.
Security deposit regulations
Tennessee does not have laws governing how much landlords may charge for security deposits and does not forbid non-refundable deposits. There are no regulations about charging additional fees, such as a pet deposit. This means landlords can stipulate any such security deposit matters, but it must be reduced to writing and form part of a signed rental agreement.
According to Tennessee regulations, landlords have 30 days to return their tenant’s security deposit, which must be held in a separate bank account. The property owner must inform renters about withholding the repayment of a security deposit and justify this decision. Landlords should present tenants with a moving out checklist and itemized list of damages or charges. Authorities recommend that tenants request a joint inspection upon vacating the premises as is their right per state regulations to ensure appropriate application of a landlord’s intention to withhold their security deposit or part thereof.
Rent payment regulations
Tennessee regulations are stringent regarding rental payments. Rent is due on the 1st of each month unless another date is agreed upon and stipulated in a rental agreement. Pro-rata charges must be implemented for tenants who move in after a calendar month starts. Five working days’ notice constitutes the grace period for late payments, whereafter a landlord can charge late fees which may not exceed 10% of the rental amount. Notice of rental increases is not regulated but should form part of a lease contract.
Tenants can withhold rental payments after filing a complaint with local authorities if the house is inhabitable and their landlord has done nothing to rectify the matter. In such cases, tenants pay their rent to county authorities until remedies are implemented.
Tennessee does not have mandatory entry notification regulations, but guidelines suggest that landlords provide a day’s notice of their intent to visit their property. This includes showing the home to prospective tenants during the last 30 days of the current renter’s occupation or non-emergency repairs and maintenance.
Notice is not required for emergency entry, although the landlord and tenant should agree on what constitutes an emergency while discussing their rental agreement. A property owner can also access their rental during a tenant’s extended absence, the length of which should be stipulated in their contract.
The value of a rental agreement has been mentioned before and is part of Tennessee state regulations. A rental relationship is not legally binding unless it is written and signed by both parties.
While landlords have the right to screen potential tenants, they cannot discriminate against them based on religion, nationality, race, sex, disability, or family status, as this constitutes a violation of the Fair Housing Act. However, property owners can run financial and criminal record checks as part of the vetting process.