Expert Advice When You Need It Most

Single Family home is under LLC. Signed leasing contract with LLC as landlord. What are my personal liabilities if LLC is sued?

I hold a single family home under a LLC name. The tenant-Landlord leasing contract is also signed under the LLC name. I would like to know , what are my personal liabilities if a tenant or someone else decide to sue a landlord (my LLC). I am asking this as I would like to buy more homes under an LLC and rent them. So far, I have a very good renter for last 2 years.

Q2: What if I buy property under my personal name and then sign a leasing contract with tenant under a LLC name (LLC as landlord or property management). Is it legally OK. What are my personal liabilities if someone sues an LLC in this case.

Save

Attorney answers (1)

Reputation Level 10
Generally, one of the advantages of having rental property in a Limited Liability Company is that any liabilities that might accrue to the owner of the property are the responsibility of the LLC only, and not of any members of the LLC. This can create some protection for your personal assets, provided that the liability doesn't accrue as a result of your own actions, such as if you left a door unlocked and some of the tenant's property was damaged or lost as a result.

You should also be sure to maintain the appropriate separation between the LLC and your personal affairs. This includes, but is not limited to, maintaining a separate bank account for the LLC's income and expenses and signing documents as LLC manager. If you don't have an operating agreement for the LLC, that is also advisable to clearly document the LLC's internal structure and operations.

If you buy property in your name and then lease in the LLC name you're likely to create confusion on the part of liability that would be to your detriment. If someone sues the owner of the property, that's still you regardless of whether the LLC is misidentified as Landlord in the lease. If the LLC is property manager then you bring the LLC into the mix for potential liability as well.

Can't find what you're looking for? Ask a Lawyer

Get free answers from experienced attorneys.

 
Ask now