What do you all do legally to protect yourself from being sued by your tenants.
You can't keep someone from sueing you except to not give them a reason to do so.
Take care of your properties to keep them in good condition and be as nice as possible to your tenants.
I went to an attorney to be proactive in setting up asset protection. I recommend you do the same. After someone sues you is too late to protect your assets.
We make sure there are no clear violations and we carry plenty of liability insurance. With our legal system if someone wants to sue you they can; the issue is whether or not they can make it stick. Fix what needs to be fixed and protect your reputation as a LL.
Agreed with @John Underwood ! Having a strong HOI policy (make sure you review with your insurance provider at least annually), holding your property in the correct legal entity (LLC if that works best), and possibly an umbrella policy covering all of your properties (and yourself) may be a good place to start!
Dont be a slumlord is a good start.
@Basil Kostaras . Thank you for all the info. I will look into them
@Russell Brazil Definitely not looking to be one
If you're properly maintaining your property and not ignoring tenants, I think most legal cases are a non issue. Most the cases that I hear about are where there are clear violations in health standards and eviction disputes are pretty straightforward that you should be able to go to small claims and discuss w/o a lawyer
Hiring a PM company though will protect you if you're concerned
Know the law, obey the law, treat people honestly and fairly.
Anyone can sue anyone.. but most tenants don't have the money to engage in litigation.
Obey the law, treat your tenants fairly and honestly, take care of the property, and document everything. Those simple things will protect you better than an LLC or umbrella insurance.
Being a good landlord, keeping up with repairs, knowing and complying with the law are all good steps. Consulting a real estate attorney is a vital step in this process. I am not sure how your investments are structured but consulting a good real estate attorney can help you add layers of protections where they wouldn't be able to come after you in the event you get sued. I highly recommend you hire a real estate attorney soon if you haven't done so. Despite our best efforts to be a good landlord, there are people who are just looking for someone to sue out there. Your assets should always be under legal entities that provide protections against that.
Another important item is to be sure you understand fair housing laws, and your city/state landlord laws. Not knowing/following those is probably the easiest way to find yourself in trouble (though typically not technically sued).
If you don’t want to spend the time to learn them, hire a good PM to handle it for you.
@Nathan G. It’s not me who won’t obey the law.. I’ve heard tenants having mold in the house due to a leak coming from the washing machine, when the tenants noticed it, when they were moving out, that’s when they sued.. if it wasn’t reported to the landlord, I’m sure he/she would have fixed it
My post is referred to In that respect.
@Nundye Ogor . Yes! Exactly! They are always looking to sue for something. As I posted.. my concern was if a tenant doesn’t report a leak, then becomes a mold issue, tenants noticed mold then sued, they were having health issues. In that case how do you protect yourself. I thank you for your help.
Originally posted by @Melissa Man :
@Nathan G. It’s not me who won’t obey the law.. I’ve heard tenants having mold in the house due to a leak coming from the washing machine, when the tenants noticed it, when they were moving out, that’s when they sued.. if it wasn’t reported to the landlord, I’m sure he/she would have fixed itM
Mypost is referred to In that respect.
I manage 400 rentals and have never been sued. I've asked the question of property managers I network with, some who manage thousands of rentals, and for them to be sued is extremely rare. I've asked the question many times over the years here on BiggerPockets And don't recall a single landlord telling me they were sued and lost.
There's very little reason to worry about tenants suing you. In the rare instance that it happens, you will probably not lose. In the rare instance that you lose, the award will be covered by your insurance. In the rare instance that insurance does not cover your loss, you can probably cover it yourself because it won't amount to more than a few months of rent, moving expenses, or other related loss.
Your tenant is not going to sue you for a million dollars and win just because they found mold behind the washing machine. It's funny to see people spend so much time, money, and effort protecting themselves when there's absolutely no evidence of an actual threat to them.
Originally posted by @Melissa Man :
@Nundye Ogor. Yes! Exactly! They are always looking to sue for something. As I posted.. my concern was if a tenant doesn’t report a leak, then becomes a mold issue, tenants noticed mold then sued, they were having health issues. In that case how do you protect yourself. I thank you for your help.
In your specific example, what do you see as your liability? The tenant discovers a leak and mold. As long as you respond by fixing the leak and removing the mold, you have no liability. The tenant can sue but they are unlikely to win if you can prove that you obeyed the law and you treated your tent honestly and fairly. That is the answer so many of us have given you.
Your tenant can sue at any time for any reason, but the only time you're at real risk is when you have violated the law or somehow mistreated your renter.
The biggest reason which will be rare will be from withholding the security deposit after they go which will result in you possibly having to reimburse them ..or possibly somebody slipping and falling outside and your insurance will handle that .
Liability insurance and have the insurance guy walk thru looking for stuff.
After that, holding the property as a LLC (lim liab corp) at least protects you from recourse (beyond the prop itself) on a claim.
@Nathan G. Thank you so much for your response, it Makes sense. :)
Maintain your properties. Screen your tenants. Keep good insurance. Pray to whatever/whomever you choose.
@Melissa Man have a comprehensive lease and follow it. Maintain the property and deal open with tenants. They may still sue, but hopefully you have a solid case.
3. Make sure that your properties pass the standards of your city
4. Obey Law
5. Have a prepare trail
7. Be nice to your tenants