If you want to rent out your house, the legal requirements start before you list it and continue every month a tenant lives there. At the federal level you have to follow the Fair Housing Act, disclose lead paint in older homes, screen applicants under the Fair Credit Reporting Act, honor military tenants’ right to break a lease, and report rental income on Schedule E. On top of that, your state and city set the rules for habitability, security deposits, notice periods, entry, eviction, rental licensing, and in some places rent increases. Miss any of them and you can face fines, lawsuits, or lease clauses that a judge simply refuses to enforce.
Who You Can and Can’t Turn Away
The Fair Housing Act makes it illegal to refuse to rent, set different terms, or advertise preferences based on race, color, religion, sex, national origin, familial status, or disability.1Office of the Law Revision Counsel. 42 US Code 3604 – Discrimination in the Sale or Rental of Housing and Other Prohibited Practices The law covers every stage, from how you word the listing to how you handle renewal. A phrase like “ideal for young professionals” can be read as discouraging families with children, which violates the Act even if that wasn’t your intent.
Many states and cities add protected categories on top of the federal list, including sexual orientation, gender identity, marital status, and source of income. Check your state and local fair housing statutes before you start marketing.
Screening Applicants Consistently
Whatever criteria you use, apply them identically to everyone. Running credit on some applicants but not others, or asking only certain applicants for income verification, is textbook disparate treatment. Write your screening standards down before you accept the first application and follow them without exception.
Criminal history is a particular trap. HUD has warned that blanket rejections based on any conviction can have a disproportionate impact on Black and Latino applicants and trigger Fair Housing Act liability under a disparate impact theory, even without discriminatory intent. Screening based only on arrest records, rather than convictions, is essentially indefensible. If you consider criminal history, evaluate the nature, severity, and recency of the offense case by case.
FCRA Duties When You Pull a Credit Report
The moment you pull a credit report or use a tenant screening service, you become a user of consumer reports under the Fair Credit Reporting Act. If you deny an applicant, charge higher rent, or demand a bigger deposit based on anything in the report, you have to send an adverse action notice.2Office of the Law Revision Counsel. 15 US Code 1681m – Requirements on Users of Consumer Reports That notice has to name the reporting agency, state that the agency didn’t make the decision, and tell the applicant they can get a free copy of the report and dispute errors within 60 days.3Federal Trade Commission. Using Consumer Reports: What Landlords Need to Know If a credit score factored into your decision, the score itself, its range, and the key negative factors in order of importance must also appear in the notice.
Once you’ve decided, dispose of the report and any notes securely. Shred paper copies and permanently delete electronic files.3Federal Trade Commission. Using Consumer Reports: What Landlords Need to Know
Assistance Animals Aren’t Pets
A tenant with a disability can request a reasonable accommodation to keep an assistance animal, and this applies even when your lease says no pets. The category covers both trained task animals and emotional support animals, and the Fair Housing Act’s protection is broader than the ADA’s rules for public accommodations.
When the disability and the need for the animal aren’t obvious, you can ask for documentation from a healthcare provider confirming a disability-related need. You cannot demand a specific diagnosis, demand medical records, or rely on online-only certificates sold by commercial websites. HUD has specifically flagged those sites as unreliable.4U.S. Department of Housing and Urban Development. Fact Sheet on HUD’s Assistance Animals Notice You also cannot charge a pet deposit or pet rent for an assistance animal, though you can still deduct from the security deposit for damage beyond normal wear and tear.
Getting the House Rent-Ready
Habitability
Nearly every state recognizes an implied warranty of habitability. The rental has to be safe and fit to live in no matter what the lease says about repairs. In practice that means a sound structure, working plumbing and heat, functional electrical systems, and no pest infestations. Falling short gives the tenant grounds to withhold rent or break the lease, depending on the state. The duty runs for the whole tenancy, so a furnace that worked at move-in but fails in January is still your problem.
Lead-Based Paint Disclosure
Federal law requires landlords to disclose known lead-based paint hazards before leasing any home built before 1978.5Office of the Law Revision Counsel. 42 US Code 4852d – Disclosure of Information Concerning Lead Upon Transfer of Residential Property You have to give the tenant any available lead inspection reports, add a Lead Warning Statement to the lease, and provide the EPA pamphlet “Protect Your Family From Lead in Your Home.”6U.S. Environmental Protection Agency. Lead-Based Paint Disclosure Rule (Section 1018 of Title X) Skipping this can cost over $20,000 per violation and gives the tenant grounds to void the lease.
Smoke and Carbon Monoxide Detectors
State and local fire codes almost universally require working smoke detectors in rentals, and a growing number of jurisdictions require carbon monoxide detectors too, usually in homes with fuel-burning appliances or an attached garage. The typical placement is inside each sleeping area, outside each sleeping area, and on every level of the home. Federal standards effective since December 31, 2024, also require both detector types in all units receiving Housing Choice Voucher or Project-Based Voucher assistance. Check your local building or fire code for the exact placement rules.
Rental Licensing and Registration
Many cities and counties require landlords to register the rental property or hold a rental license before leasing it. These programs usually involve an application, a fee, and sometimes a code-compliance inspection. Failing to register where it’s required can trigger fines and, in some places, strip you of the ability to enforce the lease or collect rent through the courts. Your city clerk’s office or local housing department can tell you whether your house is covered.
Writing a Lease That Will Hold Up
A workable lease identifies the landlord and all tenants, describes the property, states the monthly rent, due date, and accepted payment methods, and sets the lease term. It should also assign maintenance responsibilities, address subletting, and cover rules on noise, parking, and shared spaces. Termination and renewal clauses deserve particular attention: most states require written notice before a lease ends or converts to month-to-month, typically 30 to 60 days, and spelling the timeline out in the lease keeps either side from being blindsided.
Security Deposits
Security deposit rules are among the most heavily regulated parts of the landlord-tenant relationship, and they vary significantly by state. Caps range from one month’s rent to three months’ rent, with most states landing at one to two months, and a handful setting no statutory cap at all. Return deadlines after move-out generally fall between 14 and 45 days, with some states allowing up to 60. Most states require an itemized list of deductions. A few require the deposit to sit in a separate account or earn interest. Penalties for mishandling can run to double or triple the amount withheld, so know your state’s specific rules before you collect a dollar.
Late Fees
You can charge a late fee, but it has to be reasonable. Most states that address the issue require the fee to bear a reasonable relationship to the actual cost of late payment, and a handful set specific caps. In practice, flat fees of $25 to $75 or percentages of 5% to 10% of monthly rent are common for single-family rentals. A fee that looks like punishment rather than a reflection of real costs risks being struck down as an unenforceable penalty.
Clauses That Won’t Hold Up
Some lease provisions are unenforceable no matter who signed. Details vary by state, but the following types of clauses fail in most jurisdictions:
- Waivers of the warranty of habitability or “as-is” repair disclaimers.
- Self-help eviction language letting the landlord change locks or remove belongings without a court order.
- Blanket liability waivers covering the landlord’s own negligence.
- Clauses that make the tenant pay your legal fees regardless of who wins; many states allow only prevailing-party fee clauses.
- Acceleration clauses demanding all remaining rent at once if the tenant breaks the lease, which conflict with most states’ duty to mitigate damages.
Building the lease on your state’s landlord-tenant statute is far cheaper than discovering in court that half the provisions are void.
Running the Tenancy
Repairs and Response Times
Habitability doesn’t end at move-in. When a tenant reports a broken heater, a plumbing leak, or an infestation, you need to respond promptly, and what counts as prompt depends on severity. A total loss of heat in January is an emergency; a dripping kitchen faucet is not. Ignoring either long enough gives the tenant leverage, whether through rent withholding, repair-and-deduct remedies, or a call to the housing inspector. Keep written records of every repair request and your response, because those records become your best defense if a dispute reaches court.
Entering the Property
Your tenant has a right to privacy that limits when you can enter. Most states require advance written notice for non-emergency entries, typically 24 to 48 hours depending on the jurisdiction. True emergencies like a burst pipe or a fire allow immediate entry without notice. Otherwise, entries should happen during normal daytime hours unless the tenant agrees to something else. Entering without proper notice or without a legitimate reason can expose you to liability for invasion of privacy or, in some states, landlord harassment.
Rent Increases
On a fixed-term lease, rent stays level until the term ends unless the lease itself contains an escalation clause. For month-to-month tenancies, most states require 30 days’ written notice before an increase takes effect, though some require 45 or 60. Rent-controlled or rent-stabilized jurisdictions add caps on the size of the increase.
Retaliation
Most states prohibit landlords from retaliating against tenants who exercise their legal rights. If a tenant calls a housing inspector, requests a repair, or joins a tenant organization, you generally can’t respond by raising their rent, cutting services, or filing to evict. Many states presume retaliation if adverse action follows the protected activity within a set window, commonly 60 to 90 days, which shifts the burden to you to prove a legitimate unrelated reason.
Ending the Tenancy
Eviction is a court process, not a do-it-yourself remedy. Before filing anything, you have to serve written notice stating the reason and giving a deadline to cure or move out. Notice periods vary by state and by reason: some states allow as few as three days’ notice for unpaid rent, and lease violations, holdovers, and no-fault terminations each have their own requirements. Filing before the notice period expires is one of the most common landlord mistakes, and courts routinely dismiss those cases, forcing you to start over.
For non-renewals at the end of a term, states typically require 30 to 60 days’ written notice. Some require you to state a reason; others don’t. Either way, the notice has to be in writing and timed to the statute.
Military Tenants Can Break the Lease Early
The Servicemembers Civil Relief Act gives active-duty military members and their dependents the right to end a residential lease early when they receive orders for a permanent change of station or a deployment of 90 days or more.7Office of the Law Revision Counsel. 50 USC Chapter 50 – Servicemembers Civil Relief The tenant delivers written notice with a copy of their orders, by hand, by private carrier, or by certified mail with return receipt requested.
For monthly leases, termination takes effect 30 days after the next rent payment is due following the notice.7Office of the Law Revision Counsel. 50 USC Chapter 50 – Servicemembers Civil Relief You cannot charge an early termination fee. Any rent paid in advance for the period after the effective date has to be refunded within 30 days. You can still deduct for unpaid obligations and reasonable charges for excess wear, but concession fees and early-termination penalties are off the table. If your property is near a military installation, build this possibility into your financial planning rather than trying to fight it.
Taxes on the Rental Income
Reporting the Income
All rental income you receive goes on Schedule E of your federal return, including rent payments, advance rent, and non-refundable fees.8Internal Revenue Service. Topic No. 415, Renting Residential and Vacation Property One narrow exception applies: if you rent the house out for fewer than 15 days in the year, you don’t report the income and you can’t deduct rental expenses for that period either.9Internal Revenue Service. Publication 527, Residential Rental Property That 14-day rule mainly helps homeowners who rent briefly around a major event, not someone renting the house out full time.
What You Can Deduct
The IRS lets you deduct ordinary and necessary expenses for managing and maintaining the rental. Common ones include mortgage interest, property taxes, insurance premiums, repairs, advertising, property management fees, legal and professional fees, utilities you pay, and local transportation tied to the rental.9Internal Revenue Service. Publication 527, Residential Rental Property Repairs that keep the property in working condition, like fixing a broken window, are deductible in the year you pay for them. Improvements that add value or extend the property’s life, like a new roof, have to be capitalized and depreciated.
Depreciation
Residential rental property depreciates over 27.5 years under the general depreciation system, or 30 years under the alternative depreciation system.9Internal Revenue Service. Publication 527, Residential Rental Property Depreciation applies to the building, not the land. It reduces your taxable rental income each year without any cash outlay, which is one of the larger tax advantages of owning rental property.
1099s for Contractors
Starting in 2026, if you pay an unincorporated independent contractor $2,000 or more during the year for rental-related work, you have to file Form 1099-NEC reporting those payments to the IRS.10Internal Revenue Service. 2026 Publication 1099 The threshold rose from $600 and will adjust for inflation beginning in 2027. It covers payments by cash, check, or direct deposit to people like plumbers, electricians, and property managers who aren’t your employees. Payments through credit cards or platforms like PayPal are excluded because those services do their own reporting.
Net Investment Income Tax
Rental income may also be hit by the 3.8% net investment income tax if your modified adjusted gross income exceeds $250,000 for married couples filing jointly, $200,000 for single filers, or $125,000 for married individuals filing separately.11Internal Revenue Service. Net Investment Income Tax The tax applies to the lesser of your net investment income or the amount by which your income exceeds the threshold. Below those levels, you don’t owe it.
Insurance
A standard homeowners policy typically won’t cover a house you’re renting out. Once you become a landlord you need a landlord policy, which covers the structure, your liability if a tenant or visitor is injured because of a maintenance failure, and lost rental income if the house becomes uninhabitable after a covered event like a fire or storm. Filing a claim on a homeowners policy for an incident at a rented-out property is a reliable way to have the claim denied.
You can require tenants to carry renters insurance as a condition of the lease. No federal regulation prohibits it, though you have to apply the requirement equally to all tenants, including those receiving housing assistance.12HUD Exchange. Can a Landlord Require Their Tenants to Have Renter’s Insurance? Some local laws restrict the practice, so check your jurisdiction before adding the clause. Renters insurance covers the tenant’s belongings and gives them liability coverage of their own, which tends to reduce the claims that end up on your policy.