How do you protect yourself from something like this: http://www.weartv.com/news/features/top-stories/st...
The article states the jury found the apartment complex at fault "for not providing proper security the night their son was murdered.". I wish more details of the security protocol & horrific incident were given, but how do you protect your MFR investment from being sued over and/or won against something like this and can the same scenario be applied to SFRs?
Disclaimer: I realize that unless you're an attorney, any reply/post to this specific thread is just your opinion and I will not hold you accountable. Actually meeting with my lawyer today on a separate note and will bring it up.
Unfortunately anyone can sue you at any time for any reason and in a jury trial the jury can decide any crazy thing they want. This is why high liability limits on your insurance is very important. I carry $1/2M in liability on each property (including single family) with an additional $5M umbrella policy.
Night security, some armed retired cop should do it.
Cameras covering ever inch of the exterior would help, with notices posted.
Good door locks. There are door jamming devices can be attached to a door to be used and instructions to use them.
Written instructions to tenants to keep doors and windows locked.
Neighborhood watch meetings, the police usually assist in giving classes and materials.
Parking lots with speed bumps helps keep drivers from blasting through at 40 mph instead of 5 mph where kids dart out and get hit.
Get with your police department on a security SOP for tenants, have them read and sign it.
Fear is what keeps us from moving forward...
There are a variety of way to help mitigate the risk of a lawsuit and even aid in your defense. That said, when someone is seriously injured or killed on your property, you can just assume you are getting sued. Proper insurance is key. They will fund the defense as they will likely be the ones paying out unless they find a way to drop your coverage. Then they can appeal and play legal games before ultimately settling the suit. It's basically a cost of doing business these days.
Another alternative is to invest in a different form of passive income. Be the bank and buy notes or create them with seller financing. There is a reason why the tallest buildings in every major city have a bank name on them.
Here is an article that talks a bit more about the reason for why the management and owners were held liable for the murder: http://www.pnj.com/story/news/local/escambia-count...The linked article suggests that there had been a history of crime at the complex.
In all likelihood, the underlying claim was negligence. Now, negligence is a legal term that evolves depending on the situation, participants, etc. It is comprised of a few elements, one of which is breach of the duty of care. The most highly contested portion of that case was probably the breach of that duty of care a landlord owes its tenants.
As a landlord, property manager, owner, you should always do an assessment of your property and the environment. Attorneys have tried to put the breach of the duty of care into mathematical terms whether any action or inaction was negligent by using the BPL analysis:
P=probability of loss
L=gravity of loss
If the BP>L, then you are likely negligent. Let me give you an example using the situation involving the cited article. It is difficult to quantify all of this, so it is very much an art as it is a mathematical equation.
We know there is a history of crime in the area. We don't know if it is domestic violence, drug trafficking, kidnapping, or murder. Let's assume that it was violent crime, such as strong arm robbery, shootings, etc.
As a result, this is how our analysis looks:
L=strong-arm robbery, shooting, murder, severe injury
P=probably a high probability considering that these activities have been on going in the complex. According to the article, this complex had a history of crime.
B=cost to curb the loss. This can include stuff such as putting a gate around the complex so only residents can enter, putting in motion-activated lights, security guard, emergency/panic alarms (similar to what you see on university campuses).
Once you look at it, you can probably see how the BP>L. We don't know the complete facts, but the BPL analysis helps people understand negligence. The L is pretty high--there is not much worst than murder. The P is likely high because of the criminal activity at the complex. The B can vary depending on what the landlord chooses to do.
I know you had a disclaimer in your original post. But, as a lawyer, I should also say that this advice is general in nature and does not create an attorney-client relationship.
How does this even get to court? The apartment is held responsible for the actions of two people who are not even residents?
This kind of thing makes me upset about that state of our nation.
@Jay Helms - I saw that PNJ article this week as well. Made me sick. My family was sued growing up (B2B issue). The lesson I learned was to create levels of asset protection. This includes proper entity establishment, diferent levels of insurance, and other items as recommended by your lawyer based on your circumstances.
I hear a lot of folks poo-poo the entity issue when it comes up on here. My only thought when I hear that is - "Have you run your assumptions by your lawyer before you advocate the merits of your own self-created asset protection plan to the rest of the world?" In the end, each state is different, and everyone's requirements are different.
It's sad, you and I pay for these money-sucking lawsuits - when we renew our policy and when we are forced to overbuild and overcompensate for the idiots out there who will eat the paint chips, or in this case, kill their neighbor on your property.
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