All Forum Posts by: David C.

If I am the lawyer for your injured tenant, and I find out that:
1. you self manage
2. you have a significant net worth

I'm going to look at every battery and see how old it is, I'm going to check the dates on the smoke detectors, I'm going to check every bit of wiring, insulation, every little thing I can possibly find to get to you. To make you liable as the 'property manager' rather than as the 'owner'. If I can say you were a negligent property manager - then I'm getting Chris's stuff and I'm getting way more for my client.

If you have a PM Company - I'll do the same thing but I'll sue the PM.

Now - if everything is done perfectly, you are good, right? but that's being protectd by 'being a perfect PM' - not by having an LLC.

Now, if they fail to get you for bad PM, then I'm not sure, can they even take the house? because 'the house harmed me' - regardless of 'fault'? I guess that's where the LLC helps - you are perfect, but as owner you are responsible for 'damage done by your property' - if the owner is the LLC, then that owner can only pay damages out of the LLC 'net worth'.

Same kind of answer here. If I'm his lawyer I'm going to try to prove that the stairs were unstable, dirty, slippery, had a bad handrail, all things that you are responsible for as a 'PM', right? So I'm going to go after Chris first and hardest. If Chris is a perfect PM and the 'house harmed the plumber' by merely 'having a floor to land on' -then I'm with you - the LLC is responsible for the 'harm' and you can only get the LLC's holdings.

So... I'd agree given these examples - the LLC provides some protection - but serving as you own PM opens you up to personal liability for any PM mistakes or oversight. So... If I ever act as my own PM, I'll have a good personal liability policy. I may also put the properties into LLC's, I'd talk to a lawyer for sure, and beat him up with these examples.

Thanks for engaging in this banter, I enjoyed it.

So Chris, if you beat up a tenant for not paying rent, does the LLC go to jail and pay damages?

As long as you are taking actions, you are responsible for those actions. When you self manage, you take many actions. LLC is not protection for that.

If a shingle is blown off your roof and lands on a Ferrari, then the LLC is what damaged the car, and you are safe? Ned?

Chris, I used DD on purpose. Hiring a snow shoveler is a choice you made, not a brainless LLC. In both cases Chris did it, so Chris is liable.

When does the LLC help?

If your tenant gets asbestosis, you had the home professionally remediated back when you bought it?

But do you have any liability at all, even the LLC? Or is it all on the bad remediation company?

I doubt I'm completely right here. I'm sure there are times when the LLC protects you. But you are always liable for your personal actions. If you have a drunk driving accident, all 8 llc's are Chris's assets that could be taken, right?

So where does "Chris hired a bad snow shoveler or did not require shoveler to salt after shoveling" fall? Your LLC has no brain, Chris makes the choices.

I'd just make sure you are getting the protection you expect before going without a personal liability policy if you are self-managing, even if you have LLC.

I run my consulting business as an s corp. And I'm concerned after my reading on re liability that my s-corp does not protect me as much as I thought. If I choose to not test a program and it costs a client millions, they will go after me even though their contract is with my s-corp, but will they win?

If you are managing the property, and you actually lose a lawsuit that goes after your assets, I think the LLC is just one of your many assets.

I'm not a lawyer, I'm just repeating what I've read. I think John T. Reed has this in his books(I saw someone else here said lots of the guys here don't like him, but I'm not sure why).

If you have a slip-and-fall, and you hired out the snow clearing. I'd think if you are held liable - it would be for picking a bad snow clearing service, or not being on their azz enough. That's personal liablity - who cares who owns the house, Chris was managing it and failed to get the snow cleared, and someone slipped and fell - so Chris is liable. Woo hoo! Chris owns 8 LLC's - now I'm gonna own 8 LLC's! and Chris's BMW and his lake house.

Now if Chris is not liable - because he hired a good snow service and was not at fault, then the LLC is not liable either, right?

To get Chris out of the picture requires Chris to be making none of the decisions. Even hiring a PM, if you hire one with a bad reputation for maintenance might still leave Chris liable for hiring losers to manage the property owned by Chris's LLC?

I'd talk to your lawyer about these kind of scenarios and price liability insurance vs. LLC and transfers to LLC. If the LLC fails to fully protect, you might want the liability insurance as well.

If you manage the properties yourself, there's less value to the LLC anyway, right? you are liable for your decisions as manager?

Maybe a nice big umbrella policy is the answer if you would have tax issues with the transfer to LLC?

total noob here - no experience, just lots of reading.

Well - I'd never buy a house if each year I had to give up 12 years worth of Starbucks. HANDS OFF MY STARBUCKS!

I also never buy the extended warranty from my local dealer - there are real dealers who do real manufacturer warranties in high volume and get big discounts from the manufacturers due to their high volume. Your local dealer is not lying when he says he can't match it - he's paying much more for the warranty than the internet guys do. I've done this a few times and I'm sure I'm getting the 'real warranty' - I take it in the next time to my dealer - they look up my VIN and it shows the full extension.

This cuts out any payment BS right away. However - those guys are experts at findng other BS, so you can never really win. If it wasn't for car salesmen, I'd change cars much more often - so they end up saving me money by keeping me in my cars longer. Thank you to the annoying car salesmen!

They normally list who the deceased is survived by, which is who normally inherits property.

Pony up a few bucks for an android tablet. Its great on mine. Awful on the phone though - I'm with you there.