Judgement Against Your LLC

[Hai Loc]

Hi I am asking this question for a friend

If a tenant filed a judgement against your LLC which owns a property. Now this is during covid and LLC owner is foreign and has no way to appear in court crossing boarders also was not notified..

First Question is if you sell the property that the LLC owns does the tenants judgement get paid off? Anyway around this?

Second Question is can the LLC appeal this judgement?

FYI  the tenant is a scumbag and just trying to scam money..

[Kevin Sobilo]

@Hai Loc, the requirements to serve someone for a civil case may differ from state to state. Any LLC would be required to have a physical address within the state as well as any mailing address like a PO Box that a tenant might have. So, the LLC was likely properly notified even if the owner did not receive it.

There may be opportunity to appeal, but in my state I believe you only have 30 days to file the appeal.

In my state (Pennsylvania) as well as most other lien theory states, an unpaid judgment can be files with the county becoming a lien on ALL property owned by that LLC not just the property that tenant lived in.

When selling the property, the buyer cannot get clear title, title insurance, or financing unless the lien is paid off. So, a sale would typically not be possible unless a buyer paid cash and didn't get title insurance. Even then, the tenant could decide to go through the process and foreclose on the property.

So, in all likelihood the judgement will need to be paid.

However, since the tenant may not want to go through the time and expense to foreclose on the property, you might be able to negotiate a lower amount. It's certainly worth a try. Just be sure to get a satisfaction document signed and recorded to show this lien has been cleared when this gets paid off.