If you have a property that you want to lease or rent out, you may be wondering how to become a landlord in Indiana or what you may need to legally as a landlord. If that is the case, then this article is for you.
You become a landlord the moment you lease or rent your property to a tenant. However, there are rights and obligations for both landlords and tenants in Indiana. Knowing what these rights and obligations are can help you become a successful landlord, navigate potential issues, and resolve them without landing in hot water. We have prepared a comprehensive guide written by real estate attorneys that is a great starting point for anyone looking to become a landlord in Indiana.
This article will discuss the following topics:
- Do I need a license to become a landlord?
- What are the duties of a landlord in Indiana?
- The basics of different types of tenancies in Indiana
- Is a lease required to rent out the property?
- What is the difference between a lease and a rental agreement?
- What disclosures do landlords have to make in Indiana?
- What happens if you need to change the terms of the rental lease or agreement?
- What kind of rent payment can I accept?
- Can you charge late fees?
- What do I need to know about the Security Deposit?
- Can I raise the rent?
- What happens if the tenant does not pay rent?
- What happens if the tenant violates the lease?
- How can I terminate the lease?
- How do I terminate a rental agreement?
- How can I evict a tenant?
- Can I inspect the property while it is rented?
- What are the tenant rights in Indiana?
- What are the tenant’s obligations?
- When is property considered abandoned?
- What do I do with personal belongings left behind?
- Any special provision for pets?
- Final Note on other legal requirements
Do I Need a License to Become a Landlord?
No, there is no special license requirement to be a landlord in the state of Indiana. All you need to do is provide a safe, clean and habitable dwelling. Below we list the legal duties required of landlords in Indiana.
What Are the Duties of a Landlord in Indiana?
As a landlord, you must make sure you comply with all building and health codes.
Ensure all toilets, furnaces, windows, and doors are in working order. Doors to the outside should be equipped with working locks.
Make sure the unit has a reasonable amount of heat and hot water. All sanitary, plumbing, and electrical systems must be in working order. Indiana Landlord-Tenant Code requires Landlords to provide all heat, water, and appliances to tenants. This does not mean you have to pay for them – but you do need to make sure that there is adequate water and heat.
The Basics of Tenancies?
A rental agreement between a landlord and a tenant can be structured in a number of different ways. It is essential to understand what kind of “tenancy” you have because there are different requirements associated with each one.
If you have a lease for a fixed term, that is one kind of landlord-tenant relationship that is governed by the lease terms. It begins as stated in the lease and ends when the lease ends.
Another type of tenancy is a month-to-month tenancy. In this kind of agreement, the tenant rents out the unit and pays rent each month; however, there is no lease agreement in place. If there is a rental agreement in place, but there is no express time limit of when it begins or ends, that can also be a month-to-month tenancy (also known as a periodic tenancy, which is one that has no express end).
Is A Lease Required?
A lease is not required, but it is advisable. In the lease, you can have the terms of the rental agreement – how much rent is being charged, when it is due, whether any late fees will be assessed, what is and isn’t allowed on the property, and what utilities the tenant is responsible for, etc. The lease can offer you protection as the landlord by making it clear what is and is not allowed and what the tenant’s expectations are. If you need help with the lease, an experienced attorney can help you draft one that meets all your needs.
Lease Agreement Vs. Rental Agreement
A lease agreement and a rental agreement are not the same things. A lease is for a fixed time period. It begins on a specific day and ends on a specific day. At the end of the term, you can choose to renew or terminate. No notice is required.
A rental agreement, on the other hand, is for an unspecified period of time. It usually creates a month-to-month tenancy. With a rental agreement, notice is required before you can terminate it, as explained more in-depth below.
Required Disclosures
The Indiana landlord-tenant act requires specific disclosures. Make sure your lease agreement includes the following information:
- Identify who manages the property
- Identify who can receive service of process, notices, and demands
- Confirm the existence of a working smoke detector within the unit
- Whether the unit is in a flood plain
- Information related to water or sewage disposal services
- If renting units built before 1978, you must disclose all known lead-based paint and paint hazards in the unit
How To Change The Terms Of A Lease Or Rental Agreement
You should be aware that you cannot change the terms of a lease prior to its expiration. The only exception to this is where both parties agree to the change in writing or where the lease expressly allows for any changes.
In all other circumstances, you must wait until the expiration of the current lease.
In a month-to-month tenancy, you must give 30 days’ written notice before changing the terms of the rental agreement.
Rent
As a landlord, you can accept rent payments in any form. You are only limited by the limitations you place in the lease. If, for example, you want the tenant to only mail you certified checks, you can include that in the lease.
Late Fees
As a landlord, you can charge late fees as long as you include them in the lease. Any late fees cannot be unreasonable. Indiana courts will usually enforce the late fees that are compensation for costs to the landlords stemming from late rent payments. They will not enforce late fees that are meant as punishment.
You can choose to give the tenant a grace period, but you are not legally required to do so.
Security Deposits
You are required to return any security deposit within 45 days after the end of the lease agreement. You cannot make any deductions from the security deposit for repairs that are associated with normal wear and tear (like painting the unit, for example).
You can deduct any unpaid rent, repairs for damage to the property, unpaid utilities the tenant was responsible for in the lease, and the rest of the rental term if the tenant leaves before the end of the lease.
Raising Rent
If there is a fixed lease in place, you cannot raise the rent until the lease expires. The only exception is where both parties agree in writing to the increase.
In most other cases, you must first give thirty days’ notice before you raise the rent.
One important thing to remember is that according to protections afforded by Federal Statute, it is illegal to raise the rent because of a tenant’s age, disability, race, religion, nation of origin, or family status.
Otherwise, a landlord is free to raise the rent as long as they comply with the notice requirements explained above. Indiana does not have any laws that otherwise restrict rent increases.
Nonpaying Tenant
If a tenant does not pay the rent, you must give the tenant ten days to either pay the rent or vacate the premises. If, at the end of the ten days, the tenant has not paid, you can terminate the lease and commence eviction proceedings.
What Happens If the Tenant Violates the Lease?
Suppose the tenant violates any part of the lease (except for not paying rent) or does not uphold their duties. In that case, you must notify them in writing of the violation and give them a reasonable amount of time to correct the issue. What is considered a reasonable amount of time is not expressly defined. You should use your best judgment as always. If you are in doubt, you can always consult with an experienced attorney.
If the violation continues at the expiration of that period, you can sue the tenant to enforce the obligations. You have a right to seek attorney fees and court costs for bringing the lawsuit. An experienced landlord attorney can help you with this process.
How To Terminate The Lease?
If the lease has expired, you can terminate the lease immediately, and you are not required to give the tenant any notice.
For non-payment of rent, you must first give ten-day notice.
If you are terminating the lease because of lease violations or violations of other legal obligations, you must give notice of the violation as explained above, along with time to correct it.
How To Terminate Rental Agreements?
If a tenant has a month-to-month tenancy, you must give thirty days’ notice that you are terminating the agreement, and the tenant has thirty days to vacate the premises. If, at the end of the thirty-day period, the tenant has still not vacated, then you can bring eviction proceedings to court.
How To Evict A Tenant
Evicting tenants is a legal process that has precise requirements. It is advisable that before you initiate an eviction proceeding, you consult with an experienced attorney that can help you make sure you are complying with all legal requirements. You do not want to have started an eviction process and be denied relief in court because you missed a crucial step. That can be costly in both money and time for you.
It is unlawful in Indiana to evict someone by changing the locks or shutting off utilities. You must understand it is illegal for you to keep a tenant from entering the property by changing the locks or otherwise blocking the doors or windows. This is the case even if the tenant is not paying you as they should. This can open you up to a lot of legal liability. The only way you can legally keep a tenant out is with a court order that grants you that ability. You get that court order if you are successful in the eviction proceeding. Save yourself costly mistakes by consulting with an experienced attorney.
How To Inspect The Property
As a landlord, you are going to want to inspect the property to make sure everything is in working order, and the tenants are keeping it in good condition. The law affords you the right to enter the property for such inspections. However, you cannot just show up unannounced.
Per Indiana laws, you must give reasonable notice ahead of time that you intend to enter for an inspection, and you must make the inspection during reasonable hours. Although it is not explicitly defined what constitutes reasonable notice or reasonable hours, a general rule of thumb is that at least 24 hours is sufficient notice, and business hours are reasonable hours.
You can inspect the property for any requested maintenance request, other maintenance and repairs not requested by tenants, show the unit to prospective tenants, and do inspections as explained above.
Notable exceptions exist in the case of emergencies where there is no notice required.
What Are The Tenant’s Rights In Indiana?
If you, as a landlord, fail or neglect any of the duties as explained above, the landlord has a few rights. They may choose to sue to have a court order you to comply with your legal duties as a landlord. They may deduct money from rent to make necessary repairs if you fail to make the repairs after notice and reasonable time has passed. If the unit is uninhabitable, a tenant has the right to terminate a lease. If your negligence causes the tenant financial damage, they can sue to recover those damages. For more information read our article, 12 Issues You Can Sue Your Landlord For in Indiana
Because you can be exposed to financial liability, it is vital that, as a landlord, you understand what your legal duties are and that you fulfill those duties.
There are also special protections for victims of domestic violence. If they have an order of protection, they can request that locks be changed. You must change the locks once they give you that order of protection and make the request, sometimes within 24 hours. If you do not change the lock, the tenant is allowed to change locks to enforce the order of protection. For more information on tenant rights read our article, What to do if your Indiana Landlord Won't Fix Anything
What Are The Tenant’s Obligations In Indiana?
It is not just a landlord that has special duties or obligations. Tenants are also bound by certain legal obligations. As a landlord, you should understand what a tenant’s obligations are so you know when you have a right to pursue legal action against a tenant who violates those obligations.
A tenant has the following obligations per Indiana laws:
- Tenants are bound by all health and housing codes imposed either by state or local codes.
- Tenants must keep the rental property reasonably clean.
- All systems like electrical, plumbing, sanitary, heating, ventilation, air-conditioning, elevators (if applicable), and all other facilities and appliances must be used in a reasonable manner that does not cause any damage that is not associated with normal wear and tear for reasonable use.
- Tenants are prohibited from damaging, destroying, or defacing the property.
- Tenants cannot remove or impair any part of the premises.
- Tenants must follow all rules of the rental or lease agreement.
- Tenants must make sure all smoke detectors are in working order.
Finally, a tenant should give the unit back in as close to the original condition as it was when they started renting it. Normal wear and tear is to be expected and cannot be held against the tenant. Any damage to the unit outside of normal wear and tear can be deducted from the security deposit. For substantial damage not covered by the security deposit, or damage caused by a tenant’s failure to comply with their obligations as listed above, you have the right to file an action in court to recover those damages.
When Is Property Considered Abandoned?
In Indiana, a property is considered abandoned if the tenant has not paid rent, has not offered to pay rent, and the circumstances would lead a reasonable person to believe that the tenant has abandoned the property. If you believe that the property is abandoned, you have a right to enter the premises.
What Do I Do With Abandoned Personal Belongings?
Personal property is defined by the Indiana code as “…abandoned if a reasonable person would conclude that the tenant has vacated the premises and has surrendered possession of the property.”
There are special laws that govern what to do with abandoned personal property. Basically, if a tenant has left behind their property, you can request a court order to have the property moved to a storage facility that is approved by a court.
The order will typically give some time for the tenant to retrieve their belongings. If they fail to do so, you can move the items as ordered by the court. Before you move the items, you must serve the tenant at their last known address a copy of the court order allowing you to remove the personal property and the identity and address of the location where you intend to move the property. There is no liability to you as a landlord for any loss or damage to personal property abandoned by the tenant.
What About Pets?
There are no specific laws in the state of Indiana as it relates to pets. Per federal law, you must make reasonable accommodations for service animals.
Final Note On Other Legal Requirements
This article is meant as a comprehensive guide to the rules that govern residential landlords and tenants in the state of Indiana. There are other requirements for commercial landlords not covered here. Additionally, aside from the state laws, there may be local residential ordinances that affect the landlord-tenant relationship. As you may have gathered from this article, there are also federal regulations that may impact you as a landlord. An experienced landlord-tenant attorney can help you identify all legal requirements.
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