The following steps will not only limit the likelihood of crime, but also reduce the risk that the property owner will be found responsible if a criminal assault or robbery does occur. A landlord should:

• Meet or exceed all state and local security laws that apply to the rental property, such as requirements for deadbolt locks on doors, good lighting, and window locks.
• Realistically assess the crime situation in and around the rental property and neighborhood and design a security system that provides reasonable protection for the tenants. Local police departments, your insurance company, and private security professionals can provide useful advice on security measures.
• Educate tenants about crime problems in the neighborhood, and describe the security measures provided and their limitations.
• Maintain the rental property and conduct regular inspections to spot and fix any security problems, such as broken locks or burned out exterior flood lights. Asking tenants for their suggestions as part of an ongoing repair and maintenance system is also a good idea.
• Handle tenant complaints about dangerous situations, suspicious activities, or broken security items immediately. Failing to do this may saddle you with a higher level of legal liability should a tenant be injured by a criminal act after a relevant complaint is made.
• If additional security requires a rent hike, discuss the situation with your tenants. Many tenants will pay more for a safer place to live.

While some of these measures may be costly, the money you spend today on effective crime-prevention measures may pale in comparison to the costs that may result from crime on the premises. Settlements paid by landlords' insurance companies for horrific crimes such as rape and assault are typically hundreds of thousands of dollars -- and jury awards are higher.

Drug-dealing tenants can cause landlords all kinds of practical and legal problems:

• Anyone who is injured or annoyed by drug dealers -- be it other tenants or people in the neighborhood -- may sue the landlord on the grounds that the property is a public nuisance that seriously threatens public safety or morals.
• Local, state, or federal authorities may levy stiff fines against the landlord for allowing illegal activity to continue.
• Law enforcement authorities may seek criminal penalties against the landlord for knowingly allowing drug dealing on the rental property.
• In extreme cases, the presence of drug dealers may result in the government confiscating the rental property.
• A drug dealing environment can make it difficult to find and keep good tenants, and the value of the rental property will plummet.

There are several practical steps landlords can take to avoid trouble caused by criminal tenants and to limit their liability in any lawsuits that are filed:

• Screen tenants carefully and choose tenants who are likely to be law-abiding and peaceful citizens. Weed out violent or dangerous individuals to the extent allowable under privacy and anti-discrimination laws that may limit questions about a tenant's past criminal activity, drug use, or mental illness.
• Don't accept cash rental payments.
• Do not tolerate tenants' disruptive behavior. Include an explicit provision in the lease or rental agreement prohibiting drug dealing and other illegal activity and promptly evict tenants who violate the clause.
• Be aware of suspicious activity, such as heavy traffic in and out of the rental premises.
• Respond to tenant and neighbor complaints about drug dealing on the rental property. Get advice from police immediately upon learning of a problem.
• Consult with security experts to do everything reasonable to discover and prevent illegal activity on the rental property.

For More Information

For a guide to help landlords identify common risky situations and get specific, practical advice for dealing with them, read Every Landlord's Property Protection Guide: 10 Ways to Cut Your Risk Now, by Ron Leshnower (Nolo).

Landlords in most states have some degree of legal responsibility to protect their tenants from would-be assailants and thieves and from the criminal acts of fellow tenants. Landlords must also protect the neighborhood from their tenants' illegal activities, such as drug dealing. These legal duties stem from building codes, ordinances, statutes, and, most frequently, court decisions.

Rental property owners are being sued with increasing frequency by tenants injured by criminals, with settlements and jury awards typically ranging from $100,000 to $1 million. Landlords are especially likely to be held liable when a crime occurs on property where a similar assault or other crime occurred in the past.