Tenant suing landlord for everything he have?

8 Replies

Hi, good day!  Have you hear of any horror stories where tenant suing the landlord for everything he have? And win. Have you ever got sue by a tenant before? Why you got sue and how much did you lose? Base on your experience, what’s the percentage that a tenant sue me for everything I have and win? (Like my car, personal residence, my rental property’s) 

Originally posted by @Jack Ni :

Hi, good day!  Have you hear of any horror stories where tenant suing the landlord for everything he have? And win. Have you ever got sue by a tenant before? Why you got sue and how much did you lose? Base on your experience, what’s the percentage that a tenant sue me for everything I have and win? (Like my car, personal residence, my rental property’s) 

Put the rental in an LLC and the LLC gets sued, not you.

I have never heard any horror stories of that kind. I have read about a rental house where a second story deck collapsed during a party and of an apartment complex whose second floor exterior walkway rail fell off and the city condemned the complex. If anyone was hurt in either scenarios I imagine there was a colossal lawsuit. Both were absentee landlords. Point being, maintaining your property is a good insurance policy.

I've never personally known a Landlord that was sued at all. I certainly don't know any that have lost everything.

Does it happen? Absolutely. But so do fires and I don't give much though to those, either.

The best protection from a lawsuit is to follow the law while treating everyone honestly and fairly.

We have been a very litigious country for a while: Abe Lincoln apparently said ‘first we kill all the lawyers'. If someone wants to sue you they can, LLC or not. The suit just names everyone who has money. Make sure you have lots of liability insurance and focus on running a great business; the incidence of actual suits is miniscule.

Could you get sued - yes. For anything at anytime.

Will they win - probably not but you will foot the cost of defense without proper insurance.

How can you avoid getting sued? Have a quality lease in place spelling out all the do's and don'ts and who is responsible for what. Make sure you are not discriminating against any protected classes. And make sure when you do repairs or remodels you do everything up to code.

How could you lose everything? Negligence.

If something bad happens and the tenant can point to some level of negligence on your part then it opens you up to punitive damages and can even break the protections of an LLC.

Example: You or your property manager has a non-professional electrician (side job, no insurance, not bonded, not licensed, etc) make a repair that later causes a fire. The tenant called you to say something was funny, sparking, smelled smoky, etc and you didn't do anything about it.

The issue leads to a fire and the tenant, their family, or their guest is injured - you would be wide open to a punitive lawsuit.

Or say the tenant has a dog that is menacing neighbors, you get notified about it and take no action. The dog then goes on to bite a neighbors kid in the face. Yes the tenant's renters insurance would be first in line to pay for damages (you require your tenants to carry Renters insurance right?). Once the limits of their policy are used up or they don't have Renters insurance - guess who is also getting sued?

That's right - you. Since you were warned about the dog being a menace and didn't take action you could be opened up to being included in the lawsuit.

I hope that helps.  

hundreds of rentals over 4 decades.. and no one has sued me other than for deposit squabbles.

but I had low risk assets.. IE mainly all SFR or small commercial buildings.

GOOD insurance will be what U need.

Although the slumlord  stuff were you have deaths because of maintenance defects  those are real and can turn criminal.

Dozens of rentals for over a dozen years.  I act above board and carry good insurance but have never been sued or even threatened to be sued. 

Deposit squabbles can be common.  Ties+ ALWAYS go to the tenant.  Do not get caught up in hundred dollar drama scenes over deposit refunds. (Then come on here and whine and ask for help;)

Treating sellers and tenants well has earned me at least 3 easy off-market deals word of mouth.  The golden rule applies. It will let you sleep well at night and can reward you in more ways than one.