Are rental LLC owners personally responsible for personal or property damages cause by a renter?
Get Legal Help Today
Compare Quotes From Top Companies and Save
Secured with SHA-256 Encryption
Are rental LLC owners personally responsible for personal or property damages cause by a renter?
We have an LLC that rents a cottage and pontoon boat. If a renter were to cause personal injury or property damage with the boat, would the LLC owners be personally responsible?
Asked on March 29, 2011 under Business Law, Michigan
Answers:
SJZ, Member, New York Bar / FreeAdvice Contributing Attorney
Answered 13 years ago | Contributor
Yes, the owners of the property or the boat could very easily be responsible, so long as the renters were not causing the damage through an improper or illegal activity or use of the property (and so long as you had no knowledge of the improper or illegal activity). Overall though, you have considerable potential liability exposure. Technically, if it's the LLC and not you personally who own the cottage and boat, your potential exposure is limited to the assets in the LLC (unless there is some ground under which a plaintiff could show that the LLC is essentially just pretextual, you really own everything personally, and thereby void it's protection). Even with the LLC's liability shield, you should have insurance covering these activities to better protect your business and assets.
IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although AttorneyPages.com has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.