Here it is, the official, “Top 10 Ways to Get Sued” – guaranteed! In this post we will cover the 1st 5 Ways to Get Sued and in Part 2 to be posted in a couple of days, we will cover 5 more ways!
1. Do Business in Your Own Name. The average person gets sued three times in their life. The average business person gets sued every 3 years. By doing business with the public you’ve got customers, and eventually, you are going to tick someone off. And, if you have employees, they will do the same, and you will be liable, not to mention employees claims against you personally. By owning your business as a sole proprietor, you are begging for trouble. For less than $100 in most states, you can incorporate your business and limited your exposure. Sure, the bookkeeping and paperwork is a burden, but it’s worth the effort the first time you are sued. Good Asset Protection is key!!
2. Open Your Mouth too Wide. When you get into a spat with someone that might end up in a lawsuit, KEEP YOUR MOUTH SHUT. People tend to assert their positions too loudly, ultimately prejudicing their case in the future when in litigation. If you think you screwed up or you think someone else did, don’t say too much. Keep quiet, and talk with a lawyer about your rights.
3. Settle Without a Release. If you do get into a spat with someone and settle the matter, make certain you get the other party to sign a release of liability against you so they can’t come back later and sue you.
4. Own Real Estate In Your Own Name. If you are a landlord and own real estate in your own name, you are begging for trouble. Any claims of liability on the property will be against you personally. Consider a trust, an LLC, or both. Use of Land Trusts can be very helpful in this regard.
5. Engage in General Partnerships. As an individual doing business you are subject to many liabilities, but as a partnership, you are also subject to the liabilities of your partners. Don’t ever do business as a general partnership, consider an LLC instead. Following good partnership and joint venture principles are paramount.
Finally, having a mentor or good attorney experienced in real estate can help keep you heading in the right direction!
Free eBook: Asset Protection Strategies
Download this FREE eBook, "Asset Protection Strategies for Real Estate Investors". It will show you how to use land trusts in conjunction with LLCs, corporations, and family limited partnerships to protect yourself, your family, and your business from lawsuits, taxes, liabilities, and other financial pitfalls.
Attorney William ("Bill") Bronchick, host of Legalwiz.com, has authored six best-selling books and is sought nationwide for his 25+ years of real estate and legal knowledge. He has been interviewed by numerous media outlets, such as CNBC, TIME Magazine, USA Today, Investor Business Daily, Forbes, and the LA Times, to name a few. William Bronchick is the co-founder and past President of the Colorado Association of Real Estate Investors and the Executive Director and founder of the College of American Real Estate Investors. Click on the "About" link above for more information on William Bronchick.