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Can Landlords Be Held Responsible for Illegal Activity in Their Rentals? What Investors Need to Know

Apr 08, 2020 by Liz Brumer

A large part of reducing risk and liability as a landlord is knowing what your responsibilities are, including whether you can be held responsible for illegal activity in your rental property. Learn what types of criminal activity could fall on the landlord, what penalties could be faced if there is illegal activity, and how landlords can protect themselves.

Criminal activity in a rental and landlord responsibility

While landlord laws differ from state to state, across the board landlords do hold some responsibility for criminal activity that may occur at their rental property. This includes criminal acts like theft, vandalism, or violent crimes that may happen to the tenant but also criminal activity that is being conducted by the tenant or a guest of the tenant, such as use or distribution of illegal drugs or any crimes the tenant may commit against another tenant or guest.

While a landlord cannot prevent criminal activity from happening to the tenant, they are expected to reduce the likelihood of the event by providing reasonable safety measures to prevent crimes from happening, including:

  • Making sure doors and windows shut and lock properly.
  • Providing good lighting around the home.
  • Keeping the tenant informed of crime in the neighborhood.

If a property is broken into and there was no deadbolt or the windows were not functional, the landlord could be sued by the tenant. If found guilty, that could equate to a hefty settlement.

If a landlord discovers that a tenant is conducting illegal activity in or at their rental property, such as making, selling, or purchasing drugs, they should contact their attorney to discuss the proper steps to take according to their state's landlord laws.

Turning a blind eye or ignoring any signs of potentially illegal activity puts the landlord at risk if the tenant is arrested or if the situation escalates. The landlord should document any reports of criminal activity from neighbors or signs of suspicious activity, such as extremely high utility bills, and possibly contact the local police station to see if they have received any calls or noted activity at the property. In most cases, if there is clear evidence that could prove illegal activity was being conducted, which is directly in breach of the lease, the landlord can pursue eviction.

What penalties can landlords face for criminal activity?

If a landlord is aware of criminal activity at the property and does not take the proper measures to report or pursue the situation further, they could be subject to:

  1. Fines.
  2. Criminal penalties.
  3. The property being confiscated by the government, although this typically happens only in extreme cases.
  4. Litigation and lawsuits from either the tenant or neighbors.

How can landlords protect themselves?

If you own a rental property, make sure you are taking the proper measures to reduce the potential for illegal activity there, thus lowering your risk exposure. Have a quality tenant screening process that eliminates potential problem tenants from the start, and know how to identify potential signs of illegal activity, which could include:

  • High traffic (cars pulling up to the home and staying for a minute or less).
  • High utility bills.
  • Cash-only payments.

Take potential reports seriously, and speak with a professional before getting involved with the tenant directly. It's important to follow your state laws and remain calm if you feel a tenant may be doing something illegal.

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