Asset Protection

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liverpoolwalrus

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I am a Maryland resident and own rental properties in MD, OH, CO and FL. I also have liquid assets in the bank. If a tenant were to prevail in a lawsuit because of some mishap or situation at the property, could s/he have access to the equity in my other rental properties via a lien, for example?

Could I ever be forced to sell one of my other properties to satisfy a lawsuit? Let's assume I have no separate entities on them such as LLCs, nor an umbrella policy (I say that because my concern is that liability could conceivably go beyond the provisions of those instruments).

But, speaking of LLCs, would having the other properties in LLCs make them off limits to the litigant? Thanks.
 
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Oh, and what's the likelihood of a judgment against a landlord ever going beyond a $1M umbrella plus the $300K for a liability in a landlord insurance policy?
 
Some of this was already dealt with in the other thread, IIRC.

But, speaking of LLCs, would having the other properties in LLCs make them off limits to the litigant? Thanks.

Well, someone would have to own the LLC's, right? And that someone would be you. The "limited liability" bit means that whatever the company does bad won't bite you. It doesn't mean the company is not a part of your assets for purposes of your liability to other people. I would suspect that someone who could execute against properties you own could also execute against holding companies owned by you.

But there are very clever ways of stashing things away that can defeat all but the most ruthless judgment creditor. Some kind of banking/commercial/tax lawyer could help you out.

No idea about your insurance liability question. Depends on what went wrong and what kind of tenants you have and how they were damaged.
 
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