How do you protect yourself from being sued as a landlord ?

Question

I’d like to know what a small size landlord does in order to protect them from being sued? Is there more than just putting your business in a LLC?

Adam Martin · Answer

The best offense is a good defense so know your laws and both the rights for yourself and tenants and follow them and this will stop most lawsuits that have merit.  I self manage so any competent lawyer is going to sue me anyway so I see no point in an llc and focus on a large insurance/umbrella policy to protect my assets.  There is a lot of talk about getting sued and loosing everything but I have yet to see it happen and the only times I am aware of where it got bad for a landlord, they had it coming not following my first bit of advice.  My lease is ever evolving as situations arise I didn’t anticipate but follow your lease, treat tenants fairly, and don’t be a generally bad person and you should be good.  I’ve been threatened with a lot of suits for people who were mad they didn’t qualify or mad they didn’t deserve their deposit back but I’m still waiting on those papers to be served.

Jeff Copeland · Answer

Putting your assets in an LLC does nothing to stop you from getting sued. It just limits your exposure to the only assets lowed by the LLC.

To prevent lawsuits, do things to prevent people from getting hurt or killed on your property:

-Inspect your properties regularly for trip and fall hazards, fire hazards, and other safety issues.

-Repair things quickly to avoid any appearance of negligence.

-Use licensed contractors (especially for things like electrical work)

-Limit tenant access to dangerous spaces such as the attic.

-Check out http://www.evicttv.com/categor...

To protect your interests once an incident occurs and/or you do get sued:

-LLCs and other entities can limit your exposure, but aren't always feasible (for example, when using conventional financing properties may need to be titled in your own name).

-Property and casualty Insurance for the property itself insures you for things like fire and storm damage (this doesn't really have anything to do with getting sued, but is obviously important)

-Maximize your liability coverage on your homeowners policy (liability coverage insures you against wrongful death, injury, or scarring of someone on your property). Most homeowner's policies will max out at $300k to $500k for liability coverage, which may not be enough in the event of a wrongful death or personal injury suit.

-Have an umbrella liability policy that kicks in where your homeowners coverage maxes out. $1M to $2M in coverage is fairly typical here.

Bruce Woodruff · Answer

Common sense. Make your properties as safe as is reasonably possible and keep them that way.  This is where most people fail.

Have an appropriate amount of liability insurance and then a bit extra... no need for an LLC....

Nathan Gesner · Answer

Know and obey the law. Seriously, that will protect you far more than an LLC or insurance. Most disputes between Tenant and Landlord are over security deposits. Know and obey the law, treat the Tenant fairly, and document everything. I manage 400 rentals and have never been sued once. Even if I were sued, I have all the documentation to back up my actions.

Peter Mckernan · Answer

1. Be professional and nice

2. Know the laws and abide by them and make the tenants abide by them

3. Screen the tenants intensely prior to having them move in (check employer, landlord history etc.)

4. Carry an Umbrella policy

5. Have the properties in an LLC

6. (bonus) on all rentals if you are doing work have a license and bonded person working on it/them

Eliott Elias · Answer

LLC will not protect you

Have a rock solid lease

Blake Johnson · Answer

Make sure you are working with an attorney you trust and have this attorney draft you a lease/management agreement. When I first started out, I spent thousands on specific agreements for my operations (management agreement and lease agreement specifically). This has protected me throughout the years.

LLC is a great protection as well.

Basit Siddiqi · Answer

Bring up all your concerns to an insurance agent and an attorney. See which can provide you a resolution and allow you to sleep well at night.

Melanie Thomas · Answer

Stay above board, always CYA and have a few good attorneys on hand. Even with that said, I have paid a ton of money just to be on the "right" side. Anyone will sue these days for anything. Good luck, happy investing!

How do you protect yourself from being sued as a landlord ?

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