Illegal Rentals: What landlords need to know to increase the profit potential of an investment property. Often, single-family home owners consider converting an unused basement, attic, or in-law suite to a separate apartment.
However, creating a duplex or even triplex property out of a single-family home is not as simple as walling off a separate entrance. Adding an apartment into an existing house may violate local zoning ordinances, and so may be considered illegal.
Basement apartments are popular in some areas due to the shortage of affordable apartment homes. To meet legal building requirements, a basement apartment must meet certain criteria. These can include a minimum ceiling height, a minimum number of windows and exits. And possibly even its own utility meters.
Illegal Rentals: Proper zoning and permits
The same thing goes for an in-law suite. It requires the proper zoning and permits to rent out – even to family members. You should also consider things like the availability of parking. Other things include proper refuse removal for all residents, and disposal.
Renting out an illegal apartment can be a liability minefield, both financially and legally. If you’re caught renting out an illegal space, there are a number of possible penalties you could face.
You may have to evict your tenants and pay a large fine. In some cases, you may be ordered to pay for your resident’s relocation expenses, as well as any damages they claim. So, your financial losses could be considerably more than your gains.
Combining utilities with the main house is another potential hazard. Residents may not monitor their utility use if they never see a bill. Adding a flat amount for utilities in the rent is one of the more common options, but may not always be the best.
If something goes awry with the lease, you will have little legal recourse. Courts are unlikely to award you, as a landlord, any damage claims or to dismiss claims from litigious renters, if your rental property is illegal to begin with.
How we can help
If you are not sure whether the apartment in your rental home is legal – or what to do about it if it isn’t – Real Property Management Premier can help.
We have property management professionals who understand zoning ordinances and local ordinanaces. And can assist you in navigating the ins and outs of rental properties.
By meeting the legal requirements, we can help you increase the profit potential of your investment property. Get in touch with us to find out how we can help you today. Contact us online or call 954-800-4433 and ask our experienced property managers about our FREE market analysis.
We are pledged to the letter and spirit of U.S. policy for the achievement of equal housing opportunity throughout the Nation. See Equal Housing Opportunity Statement for more information.