One of many important asset protection strategies is being aware of the changing laws that affect you. You can do that by having an asset protection attorney on your team of trusted advisors (hint hint). You can also read the local paper to see what crazy new laws and regulations are being passed.
I noticed a new renters law in Seattle that is meant to prevent discrimination against renters applying to lease a property. The Seattle Times writes “the new law requires landlords to rent their housing units to qualified applicants on a first-come, first-served basis.” This means if you have multiple, qualified applicants, you have to lease your property to the applicant who applied first. Will this prevent discrimination against applicants? Maybe, but I doubt it. Will it cost taxpayers a lot of money to enforce and manage this rule? Yes. The Times predicts at least $200,000. Whether or not its crazy for a city government to be regulating how citizens rent their private property is beside the point. What should be of interest to any landlord is there is a new way for people to sue you.
Asset Protection Strategies: Don’t get sued
I speak with many, many investment property owners and landlords. One of the most common questions I receive is “what can I get sued for?” and “won’t my insurance cover it?” There are lots of ways to get sued like slip/trip and falls or environmental claims. Well here is another one to add to the list.
The Seattle Times article points out that, although renters won’t know what position they are in line, “prospective renters will also have the option to sue a landlord when they think they’ve been skipped.” So a person won’t know whether they’ve been skipped, but if they have a hunch they have, they can drag you into court. While that sucks on its own, the second problem is this is a type of claim that is not covered by your insurance policy. Insurance does not cover “intentional acts” such as discrimination or negligence. This line-skipping was fall under intentional acts and your insurance would be no good.
For this reason its important to have some additional asset protection strategies, beyond insurance, such as keeping your property in an LLC and staying up-to-date on important new laws that affect you and your business. Speak with a Seattle asset protection attorney to find the best strategy for keeping your assets safe from lawsuits.
Colin Ley is a Seattle asset protection attorney. He is also the co-founder of LayRoots along with his wife, Shreya.