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.
Federal Disclosure Requirements
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.
- Tenants must be given a government produced pamphlet titled, “Protect Your Family from Lead in Your Home.” The document explains the dangers of lead paint and how to prevent lead poisoning. Some states have their own educational information you are required to provide in addition to the federally produced pamphlet.
- Tenants must be informed of any information the landlord knows about lead-based paint relevant to the specific building. If the building is a multi-unit structure, tenants must also be provided with any records or reports that were generated as a result of any building-wide lead paint evaluation.
- An attachment to the lease, or language within the lease document itself, should include a "Lead Warning Statement" verifying that you, the landlord, have complied with all legally mandated lead paint notification requirements.
There are some exceptions to the rule, and a lead paint disclosure is not required for any of the following:
- Housing that was built after January 1, 1978
- Lofts and studio or efficiency apartments
- A rental where tenancy is fewer than 100 days, such as a vacation rental
- A single room rented in a residential dwelling
- If a state-accredited lead inspector has certified that the unit is lead free
- Housing specifically intended and designed for persons with disabilities (if a child under the age of six will live there, then the disclosure must still be provided)
- Senior retirement communities (where at least one tenant is at least 62-years-old) unless a child under the age of six is expected to live there or frequently visit
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.
States That Do Not Require Any Disclosures
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.
Common Required Disclosures
There are some common landlord disclosures generally required by most states.
- Tenants’ rights to a move-in checklist – This gives tenants the opportunity to note any damage they find in the unit that was there prior to them moving in. The responsibility is on the tenant to fill in the checklist and note the damage that is there prior to move-in. The document must be returned to the landlord so tenants will not be charged for the listed damage when they terminate the lease agreement and move out.
- Information concerning the security deposit – Provide the tenant with all the details regarding the security deposit, including where it will be held, whether any interest will be paid, and, if so, at what rate. Tenants also need to be informed about how long it will take to receive the return of their deposit after they move out and what will justify keeping the deposit. Some states require tenants to be provided with a statement of what damage will justify a deduction from the security deposit and what is considered normal wear and tear.
- Information regarding rates for shared utilities – If utilities are apportioned according to how many occupants are in one unit, for example, tenants need to be informed of how it is apportioned. Some apartment owners charge per unit, whereas others charge according to how many occupants there are in the unit.
- Nonrefundable fees – Often, landlords charge fees that are not refundable, such as the cost of a credit check, pet deposit, transfer of name for utilities, and other similar fees. Tenants must be informed of what fees are nonrefundable.
- Disclosure about who is responsible for maintaining smoke alarms – Landlords are responsible for providing smoke alarms that are in good working order at the time the tenants move in. Landlords may put the responsibility on the tenant for maintaining the alarms and keeping the batteries updated. If so, the landlord must provide this information to the tenant. If the disclosure is not made, and the tenant suffers any damage as a result of a nonworking smoke alarm, the landlord will be responsible for all the damages.
- Notice of sex offenders in the neighborhood – Tenants must be informed about how to access the state database in order to find out if there are any registered sex offenders in the area. If landlords have specific information about a sex offender’s nearby location, then that must also be disclosed to the tenants.
- Bed bugs – Tenants must be informed if bed bugs have been found in the unit or adjacent units within the previous year. If so, educational materials about how to spot the bugs and then get rid of and control them must also be provided. If tenants request it, they must be provided the most recent date that the units were officially checked for bed bugs and received notification that the units were clear.
- Smoking policy – This information must be provided prior to the tenant signing a lease. It must include whether smoking is completely prohibited on the premises or where smoking is allowed if it is. Tenants must sign an acknowledgment that they received this information.
- Property is under foreclosure – This disclosure must be in writing. If this is not given to the tenant, landlords will later be liable for all the tenants' moving costs including a portion of their rent.
- Identity of a new owner – If the property is sold, tenants must be informed, in writing, about who the new owner is, where to send the rent check, and what happened to their security deposit.
- Death in the unit – Landlords must inform prospective tenants if a former occupant died within the previous three years. You must also disclose how the person died, whether from natural causes, suicide, or homicide. This applies even if the person who died was not a tenant, but a guest of the tenant. In some states, voluntary disclosure is not required, but if prospective tenants ask about it, they must be informed and their questions answered truthfully.
- Presence of environmental hazards – If the owner knows that there is a hazardous level of mold in the unit, the tenant must be informed prior to renting the property. In addition, some states require notice of unacceptable levels of radon. Some states require the landlord to test for radon and provide the results of the test to the tenants. For properties built prior to 1981, the landlord must also disclose the possibility of asbestos being present.
- Intent to change the nature of the property – If, at the time the prospective tenant is considering renting the property, there are any plans to convert an apartment to a condominium unit or to demolish the unit sometime in the future, these plans must be disclosed.
- Knowledge of methamphetamine – If owners know that the property was used to manufacture methamphetamine, this must be disclosed to the prospective tenants.
- Right to be present at inspection – At the close of the tenancy, landlords inspect the property to see if there has been damage and whether this damage should be deducted from the security deposit. Landlords must inform tenants that they have the right to be present at this inspection.
- Flood disclosures – These disclosures are standard in states that are subject to flooding, like Florida and Georgia. The disclosure must be made if the unit has been damaged by flood waters in the past. The time period varies by state. Some states only require notice if the unit was damaged by a flood three times in the previous five years. Other states require a general notice if the unit has ever been damaged by flood waters.
- Copy of the state's landlord/tenant code – In some states, it is required that landlords provide tenants with a summary of the state code. Failure to do this excuses the tenant from following the legal requirements of tenants.
Landlord Penalties for Noncompliance
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.
How LegalNature Can Help You with Your Legal Form Needs
LegalNature can help you with all of your legal form needs. Let us help you get started today. Click here to create your residential lease agreement now.
Table of content