The biggest fear in real estate investing is getting sued, so in today's article, lets address the 5 tips when dealing with a lawsuit.

Before I start, I'll tell you a quick story. In July of 2021, a fourplex we managed, had a shooting that resulted in the death of a 19 year old girl in our parking lot.

The girl was not a resident of our complex, nor was the shooter. It was a very unfortunate event and a call I never wanted to receive.

​The police do not cooperate with the property managers in these situations, because they say we're not the victims.
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​We put the pieces together the next day to calm our residents and immediately put a plan in place to improve the security of the property by adding security fencing and gates around the homes. The residents were happy with the additional sense of security.

Fast forward to the Spring of 2024. I received a call from a law firm who was putting together a lawsuit for the girl's family. That's scary. I was served papers a few days ago being named in the lawsuit for negligence. So how do you handle these situations when they arise?

HAVE PROPER INSURANCE
There's an old saying in real estate. "It's not if you get sued, but when." Carrying the proper insurance does two things. First it protects you in cases like this. If you have the right type of insurance, you may even get legal assistance.

REMAIN CALM
​As much as being sued is a scary thing, remain calm. The worst thing you can do is to allow your emotions to get out in front of you. Don't do or say anything that may incriminate you during any proceedings. Stay calm.
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​KEEP PROPER RECORDS
One thing we do in real estate is protect ourselves through proper documentation. Maintain clean records in all accounts to build a "defensible" position against potential lawsuits. When you have the proper documentation, many lawsuits will go away.

Most of these lawsuits are fishing expeditions by the plaintiff's law firm. They are looking for a crack that they can exploit for monetary damages for their clients.

IMMEDIATE RESPONSE
Contact your insurance and attorney immediately and report the claims. Let them tell you what to do next. They will take it from there. Don't delay as the longer you delay, it can appear as if you're hiding something.

BE HONEST
If you are running an honest operation, you have nothing to hide. Answer the question concisely and specific to what they ask. Don't volunteer anything they don't ask for. Be completely honest. Any lies you provide will be found out. These law firms are good at what they do.

They will uncover the cracks. When you're being honest, you can sleep easy knowing you've cooperated and kept yourself from harms way.

CONCLUSION
The only defense in a lawsuit is your honest testimony and the documentation provided. A lawsuit is not evidence of wrong doing. It is simply one grieved party making a claim that they have to prove. As a defendant, it is your burden to prove innocence in the claim.

If you do the right things, you never need to worry. Always maintain a defensible position in everything real estate related. You'll be glad you did.
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