Landlord’s Complete Guide: Landlord and Tenant Act

Table of Contents

Buying and renting an investment property can be an excellent move for your long-term wealth. Owning property is one of the most effective ways to generate earnings in the United States, and that investment is even more profitable when you’re renting the space out to a tenant. 

One thing to keep in mind, though, is that there is a fairly strict set of regulations that bind you to specific behavior as a landlord. The same goes for tenants, and the rules are detailed in the Landlord and Tenant Act. 

We’re going to go over some of the important things to note as a landlord regarding the Landlord and Tenant Act, giving you more insight into what will be expected of you when you rent out your property. 

Essential Points of the Landlord and Tenant Act

The first thing we should mention about the Landlord and Tenant Act is that its guidelines aren’t overly difficult to follow and shouldn’t cause you that much difficulty. In most cases, you shouldn’t have to refer to the act unless a conflict arises. It includes guidelines that give tenants rights and help landlords when tenants aren’t acting in a way that follows the rules detailed in their signed leases. In other words, if both parties understand the lease and are respectful of each other, you shouldn’t have to deal with too many issues. 

There are some pieces of the act that you must understand and follow as a landlord, however, and you could get into some legal trouble if you don’t. We suggest that you peruse the Act and make sure you understand it as it pertains to you before you start renting your investment property. Here are some of the essential duties and responsibilities you’ll have as a landlord. 

1. The Lease and Its Contents

There’s a great deal of flexibility in the Landlord and Tenant Act when it comes to the contents of a lease and what they mean for a tenant. This makes sense: All houses have unique qualities, and landlords will have different preferences about what can happen on their properties. 

Additionally, your state has unique disclosure rules, and your lease has to reflect them. The important thing to keep in mind is to disclose the important issues in the lease. Some issues are at your discretion — whether a tenant can smoke inside or if you’ll be charging non-refundable fees, for example — and must be listed in the lease, but you have a say in whether they exist.

Security Deposit Details

How you handle the security deposit is one of the things where you have flexibility in the Landlord and Tenant Act. It’s your job to list precisely how long you’ll be in possession of the security deposit and place it in an escrow account that generates interest. Your state will also determine how long you can hang onto a security deposit before you must give it back. 

A renter’s security deposit is also directly impacted by the manner in which the landlord cleans the house to rent again. This is one of the main hotspots in disputes with tenants over fees. Landlords often charge exorbitant hourly fees for their efforts to clean the apartment, and do so because no one’s there to watch them clean. That means they can claim more damages than was actually there. 

Of course, lying about the cleanup fees is illegal, and renters know this. That said, renters in some areas expect their landlords to trim their security deposit excessively and will respond with legal action. This makes it important to clearly detail your cleaning and restoring fees in the lease and follow them to a tee. Make clear documentation of the issues with the house before subtracting damages from a security deposit and keep open communication with your tenant. 

Your Requirements in Inspections

Luckily, there are some very clear rules when it comes to the managing of your end-of-lease inspection and charges in the Landlord and Tenant Act. In Washington D.C., you have to give your tenant a written receipt for their security deposit that includes a number of important issues. First, you must make it known that the tenant has a right to have the unit inspected while they are present. You’ll be making the list of damages to deduct from the deposit at the end of the lease, but they could be there to make sure it’s done honestly — so long as they request this meeting sometime during their occupancy. They must do so no less than 15 days before they move out. 

Next, you have to give the tenant a written notice of the date you plan to conduct the inspection. Once the inspection is complete and the costs are deducted from the security deposit, the landlord must send the remaining money to the tenant within 45 days of the move-out date. You must also keep the receipts of the deductions and original security deposit for two years after the tenant moves out. 

Make Note of Existing Damages

The Landlord and Tenant Act also requires you to inform tenants about existing damages to the home. This is especially important when those damages hold the potential of causing harm to the tenant. Ideally, you would have those issues fixed long before you rented the space to an individual. 

The same goes for any kind of health hazard in the environment of the home. Maybe you have lead-based paint, some kind of rodent infestation, bug infestation, or radon. All of those issues must absolutely be made known to the tenant verbally and through the lease and can extend out to the general area of the home. Your rental property could be in a flood zone, for example, and that fact must be made known to the renter. 

Specific Expectations for Utility Bills

Homes that house more than one tenant can become complicated when it comes to utility bills. It might be the case that you factor those bills into the rent and pay them yourself, or it might be the responsibility of the tenant. Water, electricity, gas, and garbage are all items that might have to be factored in. It’s important that you list the separation of these costs clearly when you’re writing out the lease. 

If a tenant identifies an issue with the distribution of the bills, it’s your responsibility to respond accordingly. For example, one unit might be using an excessive amount of electricity while the other unit pays more when the bill comes. These are fair issues and should be addressed. 

The bottom line is that tenants understand what they’re expected to pay. 

2. Making Repairs

As the landlord, it’s your responsibility to make repairs in order to keep the unit inhabitable, comfortable, and safe. Some examples are rodent or bug infestations, broken locks, structural issues with the home, or pipe bursts and leaks. These are issues that can cause harm or danger to your tenants, and it’s your responsibility to make repairs — not theirs. 

If you don’t make the repairs yourself, or you expect your tenant to handle such issues, your tenants have the right to withhold their rent until action is taken. They also have the right to take you to court and sue. Tenants must make you aware of these issues — not just sit with them until they become dangerous — before they decide to sue you. Additionally, the issue must not be their fault if they plan to sue you. 

They won’t have an easy time taking legal action immediately if they cause the damages, either, but you have the legal responsibility to take care of the problems once they’re made known to you. If you don’t do anything, you could face punishment for neglect. 

Couple who understand landlord and tenant act in their new apartment

3. Evictions and Lease Violations

When a tenant fails to pay their rent or breaks the terms of your lease, you might have the grounds to evict them. The ability you have to evict a tenant often depends on the clause of the lease that was broken. If it’s nonpayment, the conditions you’re under might be different than if the tenant is actively breaking the law inside your property. 

That said, Maryland law allows tenants one month to remain in the house after the established breach of the lease. If the tenant is causing clear and imminent danger to themselves, you, or your other tenants, that time frame is cut down to two weeks without the option to cure. Curing is the process of making good on the lease and getting back into agreement with the tenant. There are many cases where a person falls on hard times or there’s a misunderstanding and the lease can be cured. 

How lenient you want to be in that regard is up to you, so long as you follow the rules of the law before posting an eviction. Note that you cannot self-evict a tenant. You have to go through the proper legal avenues, and will likely be sued if you do not.

4. Screening Applicants

It’s important to screen your applicants when you’re trying to find suitable renters. Having some insight into a person’s rental history can cue you into how they will treat your property and whether renting to them is a good idea. There are a number of things you have to keep in mind when you start to screen applicants, though.

You’re Allowed to Charge a Fee

An application fee should simply cover the costs you’ll suffer when conducting a background check or spending time screening someone. These fees are a great way to siphon off applicants who aren’t actually interested, as only people who are genuinely interested in renting a place are likely to pay $20 or $25 to get screened for it. That application is also where you should acquire a potential tenant’s permission to conduct a background check. 

You will need the person’s signature or written consent to conduct a background check. Remember, you don’t have to do a background check on someone to rent to them. It’s up to you whether you would like to take that step, but your investment property could really take a hit in value if you rent to someone who doesn’t have a history of respecting property. It’s good just to look and check with previous landlords to investigate how a person has treated previous units.

You Cannot Discriminate

You cannot discriminate against renters based on their sexuality, race, family status, source of income, age, or religion. You certainly can have some requirements about the background check of tenants, though. It’s okay to refuse people based on issues like the possession of pets, a history of poor relationships with landlords and evictions, or a history of violent criminal acts, should you find any of those in the background check. 

Further, you can make determinations based on the financial stability of the tenant as well. Some people might want to rent your place, but may not have a stable income. It’s usually a good sign if the rent of your unit only takes up around 30 percent of the tenant’s income. To investigate the financial stability of a person, you can look at their credit history to check for non-payment or a history of bankruptcies.

Again, remember that your property is going to serve as someone’s home. It’s not just an investment that sits in the bank and develops interest. You’re going to be working with people and developing relationships, understanding them, and providing a safe home for them to live in. With that in mind, it’s good to have empathy and understanding for those with checkered pasts who are moving in the right direction.

Interested in Learning More About the Landlord and Tenant Act?

Understanding the Landlord and Tenant Act is just the beginning of being an effecting landlord. There’s a lot involved in getting a return on your investment while providing a comfortable living space for tenants. 

We’re here to help you be the best you can be. Explore our site for more insights into buying and renting investment properties.

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Enhanced Reporting

Your portal includes a selection of extremely useful reports. Reports are available in the “Reports” section, and are distinct from the financial statements. Unlike financial statements which are static records, Reports are dynamic real-time records that will update with current data every time you view them. 

Scroll down to learn more about Reports:

Navigate to the "Reports" module in your portal:

  • Keep in mind, these reports are dynamic records. They will refresh to display current information every time you view them. 

Enhanced Rent Roll Report:

  • The Enhanced Rent Roll Report will show the rent amount, last payment date, move-in date, lease expiration date, and security deposit amount for each of your tenants. 
  • It will also show a portfolio summary with occupancy percentage, vacancy loss, and more!

Unit Comparison Report:

  • If you own multiple units (or buildings) with Nomadic, you’ll get access to the Unit Comparison Report. 
  • This report enables you to quickly compare financial performance between your units at a glance without toggling between individual reports. 

Income Statement Month-Over-Month:

  • The Income Statement Detail – Monthly Report serves as a month-over-month record of portfolio performance. You’ll see itemized income and expense categories and can track monthly. This report will update with fresh data every time you view it. 

Financial Statements

Financial statements will be published to your portal on a monthly basis. The statements are found in your Documents library, and provide a historical record of all financial performance. The statements serve as a snapshot of financial performance over a given period, and are static documents (unlike Reports, the statements do not update/change in real-time). 

Scroll down for more info about the Financial Statements in your Documents library:

The Documents area contains monthly financial statements:

  • The statements in the Documents are are static documents. They are posted to the portal once a month to serve as a historical record of financial performance. 

Download a statement to see month and YTD financials:

You'll also find a month-over-month operating statement:

Portal Communication Tool

You can use your owner portal to communicate with our team. Any messages you send through the portal will go straight to your Account Manager. When we reply, you’ll get an email notification and you’ll also see the message in your portal next time you log in. 

Here’s an overview of using the communication platform:

Click "Communications" and navigate to "Conversations":

  • The communications module will contain a record of all messages that you create through the portal. 

Click the "New Message" button and send your message:

Responses will show up in the conversation ticket:

  • You’ll get an email notification whenever you get a response, and you’ll also see the message in your portal next time you log in. 

You can reply in-line using the comment box:

Each conversation will be logged in its entirety:

Understanding the Ledger

Your portal includes a ledger with all transactions. The ledger is populated with data in real-time as transactions flow through our accounting software. Much of this information is also available in the Reports area, as well as the Statements in your Documents library, but the ledger is the most comprehensive resource for diving into the details. 

Please scroll through the sections below to get a better understanding of how to interpret the ledger. 

By default, transactions are sorted chronologically:

  • The date reflected in the lefthand column is the actual transaction date, not the “bill date”. This is the date the transaction was actually processed. 

If you have multiple properties with Nomadic, you'll see the address for each transaction in the "Location" column:

  • You can filter the ledger to look at just one property, all properties, or specific sets of properties. 
  • If you only have one property with us, you’ll just see the ledger for that property. 

The Description column displays the transaction type:

  • BILL: this is an expense transaction, such as for repair costs or management fees.
  • CHARGE: this is a transaction  billed to the tenant, most typically a rent payment. 
  • NACHA EXPORT: this is a credit we processed to your distribution account. This type of transaction is how you get paid! 

The Amount column shows the dollar value of each transaction:

  • Positive Amounts: if an amount is positive, it reflects a transaction that is payable to you. Typically, this will be a rent payment that we collected from your tenants. On occasion, a positive number could also signify a journal entry or credit adjustment. 
  • Negative Amounts:  if an amount is negative, this is a transaction that is either payable to Nomadic or is an amount that has already been paid to you. Typically this will be for repair costs or management/leasing fees. Owner draws (net distributions into your checking/savings account) also reflect as negative amounts, since they have already been paid to you. 

The Account Balance column shows a sum of positive/negative transactions at a given point in time:

  • Account Balance should always equal zero after a net distribution has been processed. When the balance is zero, this means that all expenses have been paid and you’ve received the remainder as net operating income, leaving a balance of zero (meaning: no one is due any money, as all funds have been distributed appropriately). 

Navigating the Propertyware Owner Portal

Your portal includes some extremely useful features that help you understand your property’s financial performance at a new level, with real-time transparency into every transaction.

Scroll through the snapshots below for an overview of portal navigation! If you need more help or have specific questions about using the portal, you can reach out to your Account Manager any time for a screen share. 

You can filter all info by date range or property:

View a snapshot of income and expenses on your dashboard:

See every transaction in real-time on your ledger:

Statements and forms will be posted to your documents library:

View a suite of real-time financial reports:

See a running list of all bills, and drill down for more detail:

Under Bill Details, you'll find dates/descriptions/amounts and more:

You can also communicate with your Account Manager through the portal:

How do net distributions work?

Net distributions keep your accounting clean and simple. Each month we’ll collect rent from the tenants, deduct any repair expenses for the previous month and any management/leasing fees for the current month, and credit the remaining net operating income to your account. 

You’ll receive a statement via email each time a net distribution is processed, and can view all transaction details in your Propertyware owner portal.