Bolingbrook IL · Member since 2018 · 57 posts · 13 votes
Is it really common as a real estate investor to get sued? If yes then how can you minimize the risk for getting sued. Have you ever been sued or know someone who has?
Real Estate Investor · Burlington, VT · Member since 2010 · 2k+ posts · 1k+ votes
7y
@Rahul Handa I've been in the rental business for 15 years + now and probably had 200 individuals living in my properties. Not once have I even been threatened to be sued.
I run it as a business, and document everything. For example in VT, when purchasing a properties it has to be inspected by the state fire marshal. They'll issue a list of items (hard wired smoke det., fire rated doors, etc) and I'll make those items are addressed. My insurance companies will inspect every few years and I'll also make sure all items are addressed promptly.
Beyond that, any requests over safely issues are quickly fixed.
I have been threated by tenants 1/2 dozen times claming they are going to sue me, all bad tenants that I as in the process of getting rid of. None that threated ever did anything beyond having their lawyer send off the obligatory threatening letter.
I did have one take me to small claims court, I knew I was going to lose but let her take me just to annoy her. I ended up returning her deposit. No cost me.
@Rahul Handa Our 8 plex got sued last year (slip and fall on ice in the parking lot, broken hip). Tenant was successful in the suit and awarded $100k to cover her medical expenses. HOA got dropped by insurance, had to find new insurance and fees went up $100/mo because of it. It does happen which is why we carry insurance.
That's unfortunate....without knowing more of the details I just don't understand the logic of slip and fall on ice. If someone decides they want to try to walk on ice, that should be on them...what kind of a system would reward someone for falling down because they decided to be careless and walk across ice. can they sue mother nature for making it cold enough to freeze in the first place?
@Rahul Handa Our 8 plex got sued last year (slip and fall on ice in the parking lot, broken hip). Tenant was successful in the suit and awarded $100k to cover her medical expenses. HOA got dropped by insurance, had to find new insurance and fees went up $100/mo because of it. It does happen which is why we carry insurance.
That's unfortunate....without knowing more of the details I just don't understand the logic of slip and fall on ice. If someone decides they want to try to walk on ice, that should be on them...what kind of a system would reward someone for falling down because they decided to be careless and walk across ice. can they sue mother nature for making it cold enough to freeze in the first place?
I was surprised it went that way too. Pretty much impossible to prevent ice from ever forming in a shaded parking lot in the winter in Colorado. We have signs, salt, and a snow removal company that does a pretty good job, so not sure what else could have been done. Heated driveways?
I'm actually fine with it though as she's an older woman living in poverty and apparently she broke her hip pretty bad. HOA fees are still very low and cash flow is good so not a big deal for me. The settlement covered her medical expenses, not any more.
She's not even my tenant, she lives in a different building in the complex with a different owner and I've never even spoken to her, so above comments about just being a good landlord and you won't ever get sued don't apply here. Sometimes you just get sued and there's nothing you can do besides carry good liability insurance, HOA insurance, umbrella insurance, avoid situations where you can be found negligent, follow the landlord-tenant handbook rules exactly and be professional.
I’ve been threatened with suits on other occasions (security deposits, trees falling on cars, plumbing and sewer line issues) but most people don’t follow through. I think in this case she just kind of had to because of her medical expenses.
The worst case scenario would be somebody coming after your personal assets but I've yet to hear of that happening.
Lender · Philadelphia, PA · Member since 2016 · 2k+ posts · 1k+ votes
7y
If you have enough properties you will eventually get sued at some point for something. Some people get sued more than others but after a certain amount of time, money and growth, being sued happens.
@Rahul Handa Our 8 plex got sued last year (slip and fall on ice in the parking lot, broken hip). Tenant was successful in the suit and awarded $100k to cover her medical expenses. HOA got dropped by insurance, had to find new insurance and fees went up $100/mo because of it. It does happen which is why we carry insurance.
Can you tell me more about how the tenant won the case? Was there a known issue that would have prevented the fall if it were addressed before hand?
I only ask because i do not fully understand how someone is liable for someone else falling unless there was a known issue that wasn't taken care of. That being said, i am clearly not familiar in the laws regarding this :)
I was surprised she won and honestly I wasn't very involved because the HOA insurance company dealt with it, I just got updates from the woman who manages the HOA (it's a complex of 5 buildings and we own one of them). The plaintiff just slipped on some ice in a shaded part of the parking lot and busted her hip. It's icy fairly often in CO in the winter, nothing out of the ordinary and our plow guys are pretty good, so no negligence on our end, but she was still awarded some money. You'd think it would be common sense to step carefully when it's snowing in the winter time in CO, so I'm not sure how she won but she did. That area is still often icy, and we can't do much because it's shaded by a building next door, so we have some signs up and a bucket of salt there and the groundskeeper salts it as much as possible, not much else we can do. Our layers of protection were an LLC and the HOA, everything was handled by the insurance we have for the HOA, which resulted in getting dropped by that insurance company.
Thanks for this info. it blows my mind that people win cases like this when it clearly no ones fault.
Investor · Tallmadge, OH · Member since 2015 · 258 posts · 275 votes
7y
I’ll share a fun story about the one time a tenant tried to take us to small claims court (over a security deposit of course). We told her we would have to withhold a portion to repair significant drywall damage (that she admitted to causing). I’m guessing she thought it was going to be an expensive repair, and somehow got this crazy idea that if she didn’t accept the certified mail we sent with her deposit, she could claim that she never received it and go after us for 5x the total deposit (max allowable in Ohio is 2x deposit). She literally filed the suit on the same day that the post office returned the certified mail as unclaimed.
In any case, all it took was a single call from our lawyer telling her he was filing a countersuit for a frivolous lawsuit and going after her for all his legal fees, that she decided to drop the suit. A couple of ironies: the fee she paid to file the suit was almost as much as the money we withheld for damages (a couple hundred $$), and she requested that the court dismiss with prejudice (I guess thinking that the term made us look bad), but which actually meant she couldn’t go after us for the deposit again.
Since we waited to re-send the deposit until the case was dismissed, our lawyer informed us that, technically, we could simply not return any of her deposit (which was still almost $1k) and there would be nothing she could do about it, having effectively tied her own hands in the matter. We seriously considered it...