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Updated over 4 years ago on . Most recent reply

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Jordan L.
  • Investor
  • USA
17
Votes |
86
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Help Please...I'm Being Sued

Jordan L.
  • Investor
  • USA
Posted

This is my first experience with this, and to be honest, I'm panicking.  A former tenant that just vacated a property I own is suing for multiple items and a large amount of money.  Mostly on items they're claiming were not repaired.  To my knowledge everything was repaired properly.  In fact, I tend to go above and beyond regarding the presentation of my properties and maintenance.  They are suing me, my property manager's company, and my property manager individually.  What should be my first steps?

My property manager has an attorney and will follow up with me after the weekend.  I do not yet have an attorney.  I do have liability insurance through my homeowner's carrier.  Should I get my own attorney?  Would my insurance company provide one for me?  Should I contact my insurance company?

Any stories from anyone who has been through this are welcomed.  I'm literally shaking as I'm typing this.  Thank you.

Most Popular Reply

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JD Martin
  • Rock Star Extraordinaire
  • Northeast, TN
15,806
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9,835
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JD Martin
  • Rock Star Extraordinaire
  • Northeast, TN
ModeratorReplied

Assuming you had liability insurance during this time, your only move here is to forward the information to your insurer. That is what insurance is for. That's not a guarantee you would not owe anything but highly unlikely.

Don't be scared. I have been sued 5 times that I can remember (none as a landlord) and the total cost to me was about $1k, only for my own attorney fee for a suit that I had no insurance against. Here's how the law works:

1. Actual damages: if they can prove that, they could be entitled to it. That means you didn't fix the roof and it ruined their $1k big screen TV.

2. Punitive damages: your actions are so egregious, and you are so likely to do it again, and the actual damages are so small so as to not discourage you from doing it again. 

3. Reasonable attorney fees for the plaintiff.

OK, so there's your possible exposure. Now let's look at this playing out:

1. Even if found against you, you can always appeal. Lots of these things do not survive appeals.

2. You only get responsibility for your percentage of responsibility. If a court found the PM was 75% responsible for negligence, and you 25% because you didn't exercise reasonable oversight, on a $1 million verdict you would only be responsible for $250k. Percentage can never add up to more than 100.

3.Trying a case by jury is expensive. Their lawyer will not do it unless S/he has nothing to lose or they feel real sure of their case. Most cases are settled out of court. This tactic is often used just to force a settlement.

4. Your insurer is going to be on the hook for everything against you up to your limit, so they are going to mount a vigorous defense or settle if it is clear they will likely lose. 

As a public official I was once sued with a raft of others in a wrongful death suit when one of our EMTs hit a car on a run and killed a young girl and injured her father. That suit settled out of court for $1 million. It is pretty unlikely you caused these people more than a million dollars of damages.

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Skyline Properties

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