How to Protect Yourself Against Tenant Lawsuits

March 2, 2022

When you own property that you rent out to tenants, there is always a chance that accidents will happen. Those accidents may lead to a lawsuit if you aren’t being careful with the way you run your business. It is important that you take steps to protect yourself so you can keep your business safe and avoid lawsuits whenever you possibly can.

Use Insurance

The first thing you need to do is make sure that you and your properties are properly insured. Doing so will give you a lot of coverage so you can take care of any issues without facing a lawsuit yourself or having to pay hefty fees. Your insurance will protect you and provide financial security if an accident happens. There are probably local regulations about the kind of insurance you are required to have, so make sure you are in compliance with all such regulations. You may want additional insurance coverage to make sure that you are totally protected in the case of an incident involving your property. Having enough insurance will protect your assets and keep you protected as well.

Secure Your Property

You also need to make sure that your property is properly secured. If negligence is found on your part it makes it far more likely that you will face a lawsuit. However, if you are properly securing your property you will be much less likely to face serious consequences. This involves both using security measures and making sure that you take care of necessary maintenance and repairs. Staircases are a common concern for premises liability if they are in need of repair. So make sure you are always on top of your maintenance tasks so you don’t risk a potential safety hazard. You can hire maintenance workers or even a property management company to help take care of maintenance tasks at your buildings.

Set Up an LLC

When you are establishing yourself as a landlord, it is a good idea to structure it as a business. The LLC structure will protect you personally from liability so that if you are sued it is actually your business entity, not you personally. That will ensure that you don’t risk your own money and financial security if something goes wrong at one of your properties. An accountant can help you to set up your LLC and let you know what needs to happen to make that a reality. It’s important to make sure that your business is properly structured so you can protect yourself from liability when unexpected events occur.

As a landlord you have a lot of responsibilities, and it is important that you stay on top of them to keep everyone safe. Even when you do everything right, though, accidents can still sometimes happen, so you want to take steps to protect yourself. When you have put in the work to keep yourself safe from potential lawsuits, you can focus on keeping your properties nice and well maintained.

Read this next: How to Keep Your Costs Down When Buying A Home

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