All Forum Posts by: Terry Portier

This is the reason I never pursued law school is all grey ha-ha, rare to see black and white and clear fact that's too simple and cheap! John if you were to introduce defendants which could be a long line of them is my point, that makes it less clear and as I said a long trial. Then if you were to introduce five other attorneys in the same state less clear by their experience, five from different state even less. Question is do you pay an attorney to set up an LLC with such ambiguity and vagueness or do you set it up on your own, why not, or pile on mounds of insurance? Insurance claims cost money in premiums usually, and can lead to cancellations. People have said you don't need an LLC until you have assets, what about your current job?

LLC of Sole Proprietary? There in lies the question?

I'm with Mitch on this one and can not even imagine a PM(in many cases a LLC) providing any legal protection to an owner, beyond my logic. If it did there s/b no problem getting them to sign a release of liability which none will. Just to begin the owner would have to disclose all the homes equipment maintenance schedules (furnaces, hot water heater, sump pumps, dryer vents, etc), grandfathered in code violations that could pose a safety risk, etc, and just because a house meets code does not mean it is safe, or that somehow shifts the liability to the owner or PM and the city is not liable. Even if the owner and PM does everything correct, that does not release any liable claims to a potentially long supply chain of builders, contractors, building supply companies, etc, from their parts and services to the maintenance schedules they have in their owners manuals. I am struggling seeing how this would not get to a jury and a long drawn out trial in most cases that involve big money and/or lives. Just don't want people to get the idea a PM is adequate legal protection of any sort, I question that and would not take it to the bank.

This thread is struggling to answer the OP’s question, no direct answers, cited law(s) or referenced cases.

I’ve called my states Commission’s and General Attorney’s office in search of such cases, only thing I have found so far is free legal advice at both I am pursuing.

I wanna see proof in the pudding....Anyone know of a place where you can easily search for state cases to find out if a LLC was sued and pierced to the owner/operator or not?

Steve, I was talking to our states Dept of Commerce yesterday looking for small business start up grants and found out they have a legal dept that helps for free. Also our local university has a small business development center. We are looking for the answer to this question too and feel it is important to get the correct answer, so what I think we will do Monday is start with them and look for some cases in our state to see if an LLC has been pierced. Will keep you posted.

Here are the holes in this line of reasoning and where it gets convoluted. For example, if you the owner builds based your own design they might be more liable for picking the wrong material, fasteners, assembly, etc, and not having a structures professional design it for crash loads, failure paths, etc, but not necessarily if there are material issues at the OEM level….. If one were to purchase a “rail kit” from company that can enter into the equation too, then the owner of the kit may be liable or both. If the OEM has a material failure like a rail and it can proven that the rail is sized incorrectly or of the wrong grade of material, etc, or the OEM failed to test to failure or establish max load, etc, then the OEM can be liable or any combination from the owner, to the kit, to the OEM can all share in the blame. I could go on and on, but you get the idea, why I said this could lead to a long evidentiary hearing, especially if lives or big money is at stake…..Happens! I just don’t think due to all the litigation it is reason for too much concern but I am no attorney, as stated probably depends on the assets involved and how hungry that makes attorneys.

I’ve worked for fortune 500 companies over thirty years now as an Engineer that’s why I can’t spell ;). I’ve designed, manufactured, written scheduled maintenance procedures both at the OEM and field service level. I took the LSAT to be a Liability Attorney but never pursued it. I’d like to see a liability case like this in court and council with good technical representation. In my industry, it’s the Federal Governments stamp of approval that is at risk regardless of whom owns, manages, occupies. I could imagine all the finger pointing in a Landlord/Tenant situation to the OEM’s, builders, city, owner’s, pm’s, etc….I know I could have the courts head spinning, I’d doubt as I said with good technical representation it is clear who owns the liability without a long evidentiary hearing.

X2, I've been in discussion in the start-up section past few days where I said this exactly and was challenge for talking the only 10K allotted to start-up a REI to make certain I had good legal, accounting, planning, insurance team on my side from the get-go. I'm fairly net to BP too and nothing personal to any member, but I have noticed how quickly people are to give legal advice they know nothing about. I have made the mistake of listening to them long ago.

The fact of the matter is unless you practice state RE law no matter how much you read these forums, listen to people that do not practice it that are not current, you have very limited info that’s more than likely inaccurate. Another thing is just because there are people in numbers you know operating their entity under their own or limited guidance from true professionals does not mean the numbers are correct and they are not ticking legal time bombs.

If you look at all the hearsay as having a factual basis which none do, it would ref a case, statue, law, as lawyers do and even then in most cases it is still ambiguous, vague, or from a different state that has no cross reference to yours, needing local attorney’s, judges, and court processes to sort it out. Yes it’s money making racket like many areas of law, but that’s just another fact in the big scheme of things.

Me, I’ve decided to wait and build some capital until I can get an A-TEAM on my side to advise me properly.

My .02 :)

Ok, thanks for the help. Looking at the start-up cost and complexity now of a GC business, probably just focusing on hail damaged roofs I do now to keep it simple. Then will compare to the REI which in my state looks complex. Seems like the GC rehab experience would feed the REI well, but I can see the complexities, two totally different state and IRS laws & animals, etc. And to think my first thought was to start them both up at the same time, crazy me!

OP, great thread, and funny @ Aaron think he was just patronizing you in a fun way.

Decided to slow down on the REI start-up and such large capital investments, get my feet wet by getting my CG A-license starting a construction business that eventually becomes REI, just got the GC study book yesterday, $100. I manage construction crews now for a company I don't own.

Other than I read that “investors cannot pull permits for properties they own” statement by Deyana, and worker’s comp I need to look into, what did you mean by this,

“Here in MA getting a GC (Construction Supervisor) license is complex. I've thought about it but then I'd have to carry workman's comp and insurance and the entire equation changes. That was not in my immediate plan for investing. It would change things with the IRS and I'm not sure I want to go that route. “

Would it not expand your business portfolio to have a CG license so you can possible avoid this predicament and can sell construction work?

Well I have taken many short cuts over the past 50+ years and graduated from the school of hard knocks later at a higher price, firm believer of 9xs out of 10 you get what you pay for.

I hope nobody takes this personally, but my advice would be never take legal advice from someone that is not currently practicing, in this case RE law, in the state you are operating in. Your job and career are assets one mistake could open them up to litigation in the form of a judgement, wage garnishments, to the life extent of the states statue of limitations. Also, imo, it is an internal contradiction to not have mitigation assets to protect in a risky investment platform such as REI. Might be less risky less legally and economically complex approach to build assets by some other activity first, and slowly build the REI. An example might be a construction business, learn how to run a successful simpler business and the market, contractor relations and labor laws, etc, then move to REI where more capital investments are at risk.

@Babik: My point is back in 1997 when I leveraged a REI based on personal income/qual, I never stopped to think of the legal ramifications of what I was doing in this case MO, how absurd! Yes there was legal advice in the courses back then, but how could it be accurate coming from Dave Del Dotto who did not practice law in MO? I consider myself lucky and will not make the same mistake is all I was saying. I never stopped to think what if I lost my earning potential to garnishments or lay-off which I did and could not finish the project or I misjudged the transaction as a gain not a loss which it was, in which case I may have lost my only $10K I had as extra or expendable money throwing me out of the business into bankruptcy which it did.

Seems like I am the odd man out on this thread, lol, that’s ok there is no way to give anyone advice without knowing all the details of their situation, in that respect mine is as good as any. ;)

Well had a chat with an attorney so far that wants a 3,000 retainer, and although he spent 30 mins on the phone with me answering my questions with regard to setting up my LLC, or whatever entity he and a CPA determines I need(C, S, corps, sole propriety, etc) seen others on this site getting the same rates for knowledgeable attorneys, of $250-300/hr. Along with he working with a CPA to determine a tax basis since a LLC has none I found out, a good CPA cost too. So that my entity or entities and I can operate under my states RE laws with regard to also hiring contractors, the legal contracts and tax forms I need, pulling permits, paying them some way, how I take in income, etc…..workers comp, etc, And if I introduce a HM partner so that partner adheres to state lending laws in or out of the LLC (not sure which way to go there). So that I am protected as an LLC and personal assets, so that I keep accurate books and records, so that I understand insurance both business and personal how much and what I need with regard to the LLC and personal assets, and on, and on, and on. I've also chatted with my states REC, Bankers commissions office, dept of labor, etc, just not as simple as I thought. Understanding that I can do some of that myself, but that takes time away from looking for deals and learning my market.

And I have not even got to the start up marketing, searching, and other overhead cost of running the business.

I did this once back in 1997 purchased a rehab home thinking I be a millionaire in a short time after listening to Dave Del Dotto. Well after a lot of hard work after my 9-5 and money it was a complete loss since even after reading and listening to all the “guru’s” at the time I still did not know what I was doing. These days the laws and red tape I am learning are more complex, I don’t plan on making the same mistakes. Just my .02!