Shifting Gears a Little

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We’ve been talking about safety over the last couple of these little chats, which is under the risk umbrella of “liability”, so I’ll hang here under that cover for a little bit.  First of all, if you’ve got an established entity, probably an LLC, you’ve already started the basic requirements of liability protection.

If you’re touring a vacant OR an occupied property and “something happens”, your first level of defense is going to be your LLC which, by the way, assumes that you are visiting that property as someone doing business in that LLC.  So what kinds of things could possibly happen during a property visit?

Wow, well – any number of things, many of which you may not have caused, or inadvertently so.  Like turning on a light, but the fixture is shorted out and wires heat up and a slow-burning fire begins to smolder,  only to burst out long after you’re gone.  Did you do that?  Well, yeah – but did you cause it?

Or you test a kitchen sink and it’s difficult to turn on the faucet.  Finally, you get it to turn, but no water comes out, so you shut if off again.  However, something broke inside that faucet and long after you’re gone, water starts leaking and eventually turns into a massive flood.  Did you do that?  Cause it?

As you can see, there’s an unlimited number of wacky things that can happen that someone can attribute to your carelessness or neglect, and property owners may be looking for someone to blame.  Now, in these simple examples, homeowner’s insurance should cover it all, but what if there is no insurance, or the property is bank-owned or corporate-owned without that kind of insurance?

Another area of concern with occupied properties or properties that may be in a probate situation is that there may be valuable possessions in the property.  If you are someone that has gone through the property then something turns up missing, you could be called out, questioned, or charged with theft.

So having that LLC protection is a good start, but it may not be enough.  Talk to other investors and ask them about their Business Liability Insurance – who do they use and what kind of policy they have.  It may be something you’ll want to look into.

Over and above these “instruments” of protection, nothing does it better than common sense.  For example, while it may be fun to take friends and family members through properties that you are looking at, if they are not part of your LLC, it may not be a good idea.

And it goes without saying, but I’ll say it anyways – you absolutely need to be above reproach when it comes to integrity and honesty.  It doesn’t matter if the property has been vacant 4 years and all of the owners are long gone, do NOT ever remove a single thing from a property until you own it.  Yes, we often see cool stuff just lying there, but until you own it, it’s still someone else’s stuff.  Period.

If you maintain the highest level of integrity and ethics in your dealings with everyone, whether they are watching or not, your business will be far better off.  And you’ll sleep better knowing that’s how you do things, whether it’s YOU or someone that works for you.  Be safe, be honest.



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