Posted by Rich-CA on October 23, 2007 at 22:09:36:
They can try to get to you anyway. It would depend on what the facts of the case are and the judge you get.
llc protections, question please - Posted by bo
Posted by bo on October 23, 2007 at 13:27:27:
This is an extension of a post in the financing section.
If you buy a house under your personal name, and then transfer the deed to an llc…are you protected?
Banks will not let me purchase residential property under my LLC even with a personal guarantee, using a 15/30 year loan. I understand that I can almost immediately transfer to my llc though (SMLLC).
Obviously the bank is content, as I have personnaly acknowledged responsibility on the loan.
So, legally, am I protected?
If someone falls and the damages are in excess of my liability coverage, can I be personally sued? Or just the llc?
My lawyer explained it like this:
Lets say you have an llc with 20% equity in a $100,000 property, and get sued. Basically the $20,000 is at risk. You can basically talk to the bank and encourage a “friendly foreclosure” at which point the litigant gets nothing, and you owe the bank whatever they do not make up at the sheriffs sale…
Is that right???
Can someone sue me personally simply because I was the original title holder, even though it is subseuqently (prior to any cause) in an LLC?
Help me understand, please…
Re: llc protections, question please - Posted by Natalie-VA
Posted by Natalie-VA on October 25, 2007 at 14:34:46:
Bo,
Just some more food for thought…
Why would you think the bank would be content after you deed it to your LLC? Many loan officers will advise this, but they are just trying to make a sale, so be wary of their advice.
Also, who would be the insured, you or your LLC? Could this have some impact on your liability?
Lastly, you might want to find out if this affects your title insurance.
I’ve gotten around all of this by getting commercial loans in the name of my LLC. You might try to do the same.
–Natalie
Re: llc protections, question please - Posted by DJ-nyc
Posted by DJ-nyc on October 24, 2007 at 14:13:52:
For protection, get a insurance policy. I got sued 2xs and although they settled and the plaintiffs got money, they did not get my money. That is what insurance is for…
DJ-nyc
Re: llc protections, question please - Posted by Frank Chin
Posted by Frank Chin on October 24, 2007 at 04:37:22:
Bo:
I assume this is an investment property??
So you title it in an LLC?? So who is the property manager managing the place. You??
So if someone falls, then the other lawyer would sue the LLC, PLUS you, the property manager, for negligience as the property manager.
I bought a business, and the prvious owner has it in an “S Corp”. Some customer got injured, and sued for $1,000,000. I know this since the legal papers coming to my place. Who does the attorney sue.
The XYZ Corp, PLUS Mr. and Mrs. Owner.
I’m involved in a workmans comp lawsuit, where I fortunately have a workman’s comp policy, so I got to know a thing or two about how workman’s comp works here.
Say you own a rental, hired an uninsured contractor, sometimes inadvertatnly, to do some work and the guy falls off the roof. So, you say you only lose $20K you have in the LLC.
Here in NY State, that’s where you’ll be wrong if you don’t have a workman’s comp policy. Under NY law, if I don’t have workman’s comp, state law says they cam come after the owner, personally.
But you can’t just buy a workman’s comp policy either, just as a landlord.
As Rich says, they come after you one way or the other.
Frank Chin