When you invest in rental property, it is important to understand that much of what you can do is guided by local, state and federal regulations. In many cases, these regulations provide guidance for the disclosures which must be made to all tenants. This is a matter of law and failure to make proper disclosures can result in quite a bit of legal and financial trouble, so it is always best to ensure that you have made all of the proper disclosures.
While there are some disclosures which vary from one locality to another and it is always best to research the regulations for your own area, there are some regulations regarding disclosures that are common in most areas.
Lead-based Disclosures
This regulation is required by the federal government. To meet this requirement you should know when your property was built and specifically if it was built prior to 1978. In the event that it was, you will need to provide a specific booklet printed by the federal government regarding lead-based paint disclosure and have the tenant(s) sign a disclosure form. The booklet is called Protect your Family from Lead in your Home and it can be obtained from the EPA; Environmental Protection agency.
Hazardous Materials Notice
Be sure to check with your local ordinances to determine whether this notice is required. Essentially, it notifies tenants that a variety of materials were used in the construction and/or improvement of the property which may contain materials that could be hazardous or toxic.
Mold Notification
The subject of mold has become tremendously important in the last few years and is also one that can lead to a great amount of liability for property owners. Check with your local landlords association for guidance regarding notification of mold.
In some cases, the addendums which you provide to tenants may not actually have anything to do with potentially harmful elements in the property. In some cases, you simply may need to provide notification to tenants regarding specific rules and regulations which you establish.
One of the most common is a roommate addendum. This type of disclosure notifies tenants that each roommate is jointly liable for anything to do with their rental of the property. This prevents one roommate from skipping out and you facing a situation where the remaining roommate claims he or she is not liable.
A pet addendum is another important disclosure to consider if you are going to allow tenants to have pets in your property. Generally, it is best if you always have a description of the pet which the tenant will be bringing into the property. Perhaps you based your decision on allowing the tenant to have a pet because it seemed to be a mature, calm dog. Six months later; however, you discover that the tenant no longer has the calm dog and has replaced it with a puppy that is chewing up everything in sight. Making sure that you have a description of the pet which will be allowed to be in the property is always a good idea; otherwise, you may have no recourse since you agreed to let the tenant have a pet. There is also the matter of exercising caution regarding certain breeds of dogs on the property. If you allow a tenant to have an aggressive breed of dog on the property and someone is bitten, you could be found to be liable.
Along those same lines, you may want to take a few extra steps to protect your property if you decide to allow tenants to have a pet. For example, increase your security deposit, just in case there are problems later on. Also, make a point to check with previous landlords while you are performing the reference check to determine whether the tenant has had a pet in the past and if so, whether there were any problems or damages. Finally, you may also wish to require tenants with pets to provide a copy of their pets registration papers as well as their vaccination records.