Three Mistakes That Leave You Vulnerable to Lawsuits

One of the most expensive issues a landlord can face is a lawsuit. Even those who win their cases can end up losing thousands of dollars in lawyers’ fees. Avoid the legal hassle and protect your assets by steering clear of these three common mistakes:

1. Neglecting insurance. If you hold only a basic policy with minimal coverage, consider increasing your liability limits and adding personal liability umbrella insurance. Without this coverage, your personal assets could be seized by an injured party. Another benefit of liability insurance is that it covers the cost of your legal counsel if you are involved in a lawsuit.



2. Assuming you are not liable for mistakes made by independent contractors. Though you may believe the contractor working on your property is independent, the courts may consider him your employee, leaving you responsible for his actions. When working with contractors, make sure they are truly independent contractors by requiring them to fulfill the following criteria:
   • Setting their own hours
   • Using their own equipment
   • Signing a contract stating their independence and liability
   • Directly supervising their own work
3. Failing to get things in writing. Even if you take careful precautions to avoid a lawsuit, without written documentation, none of your actions can be verified in court. Every communication or agreement with a tenant, employee or government agency should be documented in writing.