Anyone Been Sued By A Tenant
Still debateing if worth the trouble to do land trust and LLCs on my rentals. Most still have loans.
With the extra cost involved and lower interest rates paid on business checking, extra insurance policy because of DOS clause, is it really worth it.?
What do most of you do and has anyone been sued where the regular landlord policy did not cover.
Is a 500.00 LLC worth the risk of loosing it all? You are the rich land lord. Just because the drunken tenant fell from the deck reaching for another beer....it will not matter in court. It will be your fault some way some how. (Now I may be stretching things a bit) However, talk to your attorney and I will bet he will give you the same advice. Cover Your ASSets every way you can.
The courts favor the tenant and the buyer.
So if you have money coming to you do all you can to keep it.
Good luck!
Thanks
Mike
[addsig]
I had a tenant threaten to sue us. I jumped on the Land Trust bandwagon as soon as possible. Now the tenant is ending up sueing us, but now we are protected AND we are just "managers" of the trust.
I know the LLC is cheap. But maintaining banks accounts for the different LLCs, and insurance.
If I still have a loan I understand I could put in a LLC with me as trustee and beneficiary. Then I transferr my bene rights to LLC.. For insurance to be valid I found it needs to be under the main name. So because of DOS clause I cant change existing insurance loan company would see. So I would have to pay for a second policy under the LLC name the loan company would not see.
Any suggestions still a little confused
Sorry
above should be if I still have a loan I put in Trust with me a trustee and bene.
Thanks
I've been putting off getting an LLC myself for various reasons. What we have done for now is to buy some properties in my name and some in my wife's name. Our lawyer said that he would ideally like to see us set up an LLC, but he said our jointly owned assets along with the properties in the others name would be protected if we had a tenant sue us. I think we will evenually hold properties in both of our names and one or more LLCs. I was told that you want to divide it up several ways not only because of the protection it offers, but also because lawyers look for entities or individuals that have a lot of real estate assets to go after. My lawyer said that the local lawyers are all aware of how much real estate everyone owns and what they paid for it. Kind of scary!
I'm probably old and hard headed, but my 12 units aand my car lot are all sole proprietorship, meaning my a** is probably hanging out there. I believe the secret is to not be arrogant or overbearing in the first place, as well as carrying adequate insurance to cover most of the liabilities. Haven't had a problem yet, although the bomb may very well be ticking.
Just my view,
Sorry JT(IN)
Shawn(OH)
Quote:
On 2003-10-26 08:15, joel wrote:
I had a tenant threaten to sue us. I jumped on the Land Trust bandwagon as soon as possible. Now the tenant is ending up sueing us, but now we are protected AND we are just "managers" of the trust.
Might want to check with your atty on that one. Any kind of incorporation done when AFTER there is threat of civil law suit can be deemed as useless in that particular case.
Quote:
On 2003-10-31 12:47, loanwizard wrote:
I'm probably old and hard headed, but my 12 units aand my car lot are all sole proprietorship, meaning my a** is probably hanging out there. I believe the secret is to not be arrogant or overbearing in the first place, as well as carrying adequate insurance to cover most of the liabilities. Haven't had a problem yet, although the bomb may very well be ticking.
Just my view,
Sorry JT(IN)
Shawn(OH)
loan wizard -
correct me if I'm wrong but isn't it better to be "safe than sorry"? All it takes is someone to sue you and all your entire estate could be in jeopardy. I'm sure you don't want that. I understand about treating your tenants with respect but there are people out there always looking for a loophole to get money. By placing each property in a separate Land Trust will help minimize the risk. That way if let's say a tenant sues you, they can only sue regarding that particular property and not all the properties you own as a sole-proprietor. I would seriously think about getting a better asset protection plan than you currently have. Just my opinion. Happy Investing!
I have about decided to hold off awhile even though I have the LLCs formed.
Extended warrantys, Life & Health insurance, Homeowner Insurance, Flood insurance, You can keep spending a lot of money and still not cover all risk in life.
Buy the time I add up seperate insurance policy because of DOS clause, seperate non interest paying LLC bank accounts, tax returns, attorney fee for Trust then move to LLC, it adds up. If a number of properties could be better off investing money in more homes. I guess we all have to decide how much less risk is worth.
My biggest decideing factor is cant find a attorney who knows even as much as I do about Lant Trust and LLCs. I have to assume if it was that big a risk they would them in law school about this issue. I only find investors talking about this. The lawyers would be makeing more noise about this and know about this issue if they could make a buck.
On most forums I read about people having trouble finding a lawyer who knows the issue. Much not be much demand if they havent bothered to learn.