Your Risk of Legal Liability Has Exceeded Your Comfort Zone
When you own rental real estate, you expose yourself—and your assets—to a whole new world of potential legal liability. In addition to the dozen ways a rental housing provider can trip over federal fair housing laws and local landlord regulations, state premises liability can be devastating. Courts in California effectively presume that an injury was the result of a breach of duty and shift the burden to the property owner to prove otherwise. This stems from the California Supreme Court’s view that regardless of actual fault, “liability should often be imposed on the party, often a business, most able to implement steps that promote social welfare by enhancing safety, spreading the risk of loss and ensuring compensation.” 1
In other words, some courts promote the notion that you should pay for more than your fair share of injuries occurring on your property simply because you have more money than your tenants or their customers. If you are tired of worrying about being sued in a pro-plaintiff state, you may be ready for a “change of venue.” To learn more, check out Chapter 2 of our book, How to Retire from Being a Landlord.
SOME COURTS PROMOTE THE NOTION THAT YOU SHOULD PAY FOR MORE THAN YOUR FAIR SHARE OF INJURIES
Demographic Trends May Not Be Positive for Your Area
Differences in economic prospects and cost of living can drive migratory behavior. Such differences, in turn, reflect differences in tax policies, business friendliness and right-to-work policies. Click here to see an example of how disparities in living costs impact interstate mobility. If you live in a state whose employers are leaving (and whose employees are following), you may not be able to count on past patterns of upward population growth.
DEMOGRAPHIC/ECONOMIC FACTORS DRIVING RENTAL PROPERTY PERFORMANCE:
✓ Positive migration ✓ Overall population growth
✓ Job growth ✓ Supply of rental housing relative to demand
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