Most important Michigan legal?

Question

Jason Fish · Answer

Thank you Christopher! I know a few of the laws and I expect to know and adheir to all of them.. But I figured some people just like to sue whatever they can haha so very good information!

Christopher Brainard · Answer

@Jason Fish

Hi Jason and welcome to BP.

A business license doesn't protect you from being sued. Most of the mistakes landlords make leave them personally liable for the act. A LLC will also not protect your personal assets when you are sued, unless it is properly setup and run. There are annual requirements which must be adhered to and policies that you must have in place for it to be seen as a real corporation. Even then, it has its limits. You can reference piercing the corporate vale for information on that. I personally think that until you have several properties under your belt, the LLC can wait.

The most important thing you can do is read your state laws and understand what they mean. There are many specific requirements a landlord must understand and specific time frames to perform activities in. For instance, in Nevada, there are required disclosures like lead based paint, limits to security deposits (3 months), and even restrictions on when you can enter the property (24 hours, unless an emergency). Learn all the rules, run your business ethically, and you greatly reduce your legal risk.

Additionally, you should always carry liability insurance, whether you hold the properties in a LLC or not. This is inexpensive and a carrot you can offer, if you do mess up.

-Christopher

Cory Mccarthy · Answer

@Jason Fish

While I am not a lawyer and am certainly not offering any legal advise here, I believe it to be wise to at least establish an LLC and place all of your assets into the LLC via a quit claim deed to help limit your liabilities and keep your private assets a safe distance from any legal troubles.  Not hard to do and not very costly either, but a few hours spent with a lawyer who can set that up for you and provide some basic guidance will go a long way to protect yourself.   Might want to try AVVO for a lawyer if you don't have one already or are not sure where to start.  Best of luck to you!!!