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Updated over 7 years ago on . Most recent reply

Self Manage- no liability protection under LLC?
From what I've read on prior posts it seems many have the opinion of by self-managing your rental properties, you will not gain any liability protection by owning the asset and performing the property management under an LLC. For example say in the case of "we" the self-managers forgot to de-ice and the tenant slips and falls, we are now liable because we self-manage therefore nullifying the corporate veil.
I'll be partnering with a local friend/ contractor in Maryland, and we plan on doing all the rehab plus self managing at least for the first few properties. We want the LLC for protection for our personal assets (primary residence, investments, cash)
He is a licensed/ bonded/ insured contractor. I'm thinking we could set up a series LLC and have one manage the properties while the other LLC's hold the real estate.
We are meeting with a Real-Estate Attorney this Friday and I'd like to be prepared as possible.
I'd like to hear if anyone else has opinions on this. Thank you.
Most Popular Reply
I think having an LLC for managing personally owned property may not provide as much liability protection, in that defects in the property condition or management are still the responsibility of the owner. And the lease will be between the individual owner and the lessee. Even if the LLC is the property manager, the the owner is still liable for the actions of his agents (the LLC). I manage two of my SFRs this way anyway, because the financing terms were not attractive for an LLC. I am under no illusions that I will not be sued personally for these self managed properties despite my prop management LLC. On the other hand, I am buying another property with different financing that I will place in a separate Series of my Texas Series LLC, and then the property management will be done by my management Series of the LLC. For people not familiar with Series LLC, the strategy is akin to using separate LLCs for management and ownership. Just a little cheaper and easier in states that recognize Series LLCs.