Real estate agent property management liability

[Lance H.]

Hello,

I'm serioulsy considering obtaining my real estate agents license and contracting with a local broker to manage properties. I have found a broker to work with and the set up would be almost identical to that of an agent selling properties. I would sign an independent contractor agreement outlining commission splits ect. I would also be paying this broker a fee for E and O insurance.

I realize the answers given here are not legal advice and I will be speaking to an attorney, just looking for opinions.

I know property management is a very sue happy industry, what kind of liability do you forsee in this situation? Would it be beneficial to set up a LLC and sign the independent contractor agreement through the LLC and receive the 1099 income through the LLC.

Just looking for thoughts, thanks!

Lance

[Joel Owens]

Property management is sue happy.E and O insurance carriers charge money with policies based on data they have learned over time just like car insurance.

Usually when tenants and owners have an argument the attorneys say let's go after the property manager.Property management doesn't pay much,is a huge headache,and is sue happy.

E and O knows PM is the highest form of litigation claims coupled with construction projects.

When a broker sets up a PM company they are smart to keep a separate company so if sued they can shut it down without affecting the regular brokerage or their other assets.