Posted by chi ming on August 04, 2010 at 23:34:20:
If you think about it, its a round robin of ownership
and it just complicates things. A large liability
policy from a company that has a reputation of paying
or defending its customers is better unless you can
find another member or you can lease the property to
someone else’s company to manage and let them deal with
the up front liability.
Limiting Liability in Commercial Real Estate - Posted by Larry
Posted by Larry on July 25, 2010 at 12:12:05:
We currently own some rental commercial & residential real estate (in Vermont) in our own names. We have an LLC which I am being advised to use as a management company to put distance between ourselves and any liability related to the properties. My wife and I are the only “members” of the LLC.
I am being advised to have the LLC lease and manage the properties and to execute a lease with the LLC allowing them to do this. The LLC would pay all expenses of the properties, collect all rents and distribute profits to us.
Does this arrangement actually limit our liability?
Is there a lease form that we should use for the lease to the LLC?
If injured party asked me… - Posted by John Merchant
Posted by John Merchant on August 05, 2010 at 11:24:26:
The general rule any lawyer follows when looking for possibly liable defendants is to name ALL such possible parties as defendants and then sort things out with discovery in the lawsuit.
So if I were practicing in any state and somebody tells me he/she was injured at a certain property and it appeared to me that perhaps that injury was caused by someone’s negligence, I’d name ALL persons and companies the records showed had any connection to that property, such as:
-Title Owner(s) either natural persons or corp entities
-RE Agent and Broker if I saw or heard or learned that such was listing, showing or managing said property.
-Any contractors or workmen and their employer companies whom I could identify who might have caused or contributed to the injury.
Doing nothing in your own real names, and doing all in LLC or Corp name is always better policy and would likely deter any lawsuits as the lawyer looking it over would quickly realize the owner would interject such entity existence as a defense and he could probably not find a really good target defendant.
I can personally testify that I’ve seen and been involved on one side or another with otherwise OK looking lawsuits that basically dried up and blew away when it became obvious that the only defendants were corps or LLCs
Also I’ve always believed in carrying P&C insurance(property/casualty including liability) on any property I’m involved with and also my own liability ins to cover me no matter what I’m doing.
With such ins. coverage if I were to be notified about ANY such claim arising from the property or possibly involving me or my co I’d quickly notify the ins. co. and let them deal with it.