As a commercial real estate owner, or an impending one, premises liability is an area of the law that you should be familiar with. Property management and rental property investments can be profitable additions to your investment portfolio, but there are cautions. One is that premises liability is a very real concern because litigation is costly, and if one loses in court, there will be a settlement to pay. Costs may also include negative publicity which could prove to be even more of a loss in the long term. Taking proactive measures on the advice of your business attorney who can provide legal guidance specific to your circumstances can be a wise choice for preventing problems in the first place.
After consulting with a lawyer, like an appellate lawyer in Los Angeles, CA from the Tim Kassouni law firm, they may recommend one or more of the following ways to reduce your premises liability risk:
1. Establish a legal entity specifically for managing your real estate investments. This can separate your personal assets from the entity’s assets, thus protecting you. Very often this also offers the additional advantage of tax savings. Your lawyer can advise you on these matters after reviewing your circumstances.
2. When shopping for a property management company, perform due diligence by thoroughly screening them. If there is a premises liability lawsuit in your future, the management company will be named as a codefendant along with yourself or your company. In fact, it may be their negligence which triggers the lawsuit. Make sure that the company has a stellar track record, with no previous legal actions against them. You need to be able to rely on them for properly maintaining the property and promptly addressing issues when they arise, because it is a certainty that problems will come up.
3. Perform a safety check of the premises before purchasing it, and after you close on the property. Pay special attention to what might fall under the attractive nuisance doctrine. This would include structures that might attract children and tempt them to trespass which could result in them getting hurt or killed. Primary among such things are swimming pools. It’s not enough to post a No Trespassing sign; a pool must be surrounded by a sturdy fence with a securely locked gate. Abandoned buildings, caves or tunnels, and old playgrounds could also attract children so they should be secured or removed. If you are not hiring a management company to look after and maintain the property on your behalf, then this is something you will need to do on a regular basis. If a hazardous condition develops, you must make an effort to mitigate the hazard within a reasonable period of time. You may do well to protect yourself by documenting when a problem is discovered, how you addressed it, and when you took the steps to eliminate the hazard. Your notes can be used in your defense case should you become involved in premises liability litigation.
4. Invest in general liability insurance and other recommendations provided by your attorney. You may need to add your property management company to the insurance rider, but this can be negotiated.
Take the necessary precautions to avoid premises liability litigation and act on the advice of your attorney.