Asset Protection: Are Landlords Liable for Dog Bites?

Are landlords liable for dog bites? If so how can real estate investors protect their assets?

The short answer is – yes, they can be.

According to some data sets:

  • Someone seeks medical attention in the US for a dog bite every 40 seconds
  • Almost 5M people are bitten by dogs each year
  • 60% of dog bites happen at residences

Theoretically property owners can be held liable if a tenant’s dog attacks someone on the property, gets loose and attacks someone off of the property, and can even be fined if the type of dog is illegal in that jurisdiction, or is being neglected. Harsh, but true.

Now the exact law varies from jurisdiction to jurisdiction all around the United States. There are normally tests to determine the extent of the landlord’s liability. This commonly includes their knowledge of the animal on the premises, breed of dog, and the level of control the owner has over the animal. However, just because you appear to be in the clear doesn’t mean you can’t have problems when there are pets in a rental property.

The Biggest Threats

Whether it is a dog, an exotic animal, or the tenants themselves, landlords can find themselves on the wrong end of lawsuits, and often do.

When this happens there are two big threats to deal with:

  1. Limiting liability to avoid being personally bankrupted
  2. Minimizing the disruption caused by the lawsuit itself

Without the right investment structure many landlords are just leaving themselves wide open to potentially have their personal and family assets, and incomes levied as the result of a malicious lawsuit. Without a steel asset protection umbrella your home, cars, kids’ college funds, retirement accounts, and future earnings can all be up for grabs.

Yet, while winning these cases is important, the damage done simply by being party to a lawsuit like this can be devastating. The legal representation costs are often the least of this. There is lost time off of work, expenses dealing with the case, potential for loss of rental income and even the property itself, and the ensuing loss of other income and your reputation.

True or not, all it takes is one news story or Facebook post and all of a sudden you are only known to the whole world as “that notorious property owner whose dog mauled that poor child.”

Shields Up

Picture any battle scene you like. Knights, soldiers, or Spartans; they all carry around their shields, and enter the battlefield with their shields firmly raised between themselves and the threat. Can you imagine if they all lined up facing each other, and then only after being pelted with barrages of arrows, then went to look for their shields or to ask the ironsmith to make one? It would be way too late right?

Sadly, that’s just how many real estate investors enter the property market.

Smart steps to being protected include:

  • Acquiring title to properties under the right entity structure
  • Having sufficient insurances
  • A smart asset protection plan which separates business and personal assets and income
  • Having a great attorney on staff

Perhaps even more important is not putting yourself out there as a juicy prospective victim. If you walk around with wads of hundreds falling out of your pocket, rocking expensive jewelry, and carelessly waving your new iPhone around when traveling as a tourist, you would expect to be robbed right?

If you kept those things out of sight in your pocket, your chances of being a victim may go down by 90% or more.

The same goes for being an investor and property owner. Smart asset protection moves can preserve your privacy and dramatically limit the chances your tenant’s neighbors are going to be running around wrapped in bacon begging the dog to bite them.

Authored by Titanium Asset Protection

Titanium Asset Protection is an elite asset protection firm with licensed California attorneys on staff who specialize in asset protection, trusts, corporate law, succession planning, bankruptcy, real estate, and tax law. Our team has successfully represented clients to the highest levels of the justice system in fighting to protect them, and their finances, with lead counsel Matt serving as the Ethics Chairman for Le Tip International, The Chapter of Orange for 15 years, being an honored member of the revered Wealth Counsel.

 

The Tax Advantages of Being a Landlord

The promise of ‘tax breaks’ for investing in real estate is one of the biggest draws, but what are they?

Minimizing taxes is often promoted as one of the top reasons to invest in real estate. Yet, few investors are aware of what those tax advantages are and how they can be maximized. That often leads to thousands of extra dollars being shelled out to the tax man each year. So what are the real breaks available?

Here are five ways to lower your taxes as a landlord, plus a couple of extra power strategies to investigate…

Depreciation

Depreciation is one of the biggest tax breaks for landlords. Properties and improvements degrade and become worn over time. You can get a tax credit for that. Under the new PATH Act some types of properties can enjoy accelerated depreciation, and their landlords get bigger breaks sooner. Note that this is one of the few deductions out there that mortgage lenders will allow you to add back to your qualifying income when applying for loans.

Financing Costs

Mortgage interest, lender points, and other financing fees may all potentially become tax deductions. That can be a big motivator and perk for using financial leverage to grow a portfolio faster and earlier.

Taxes, Taxes, Taxes

Yes, you can actually write off other types of taxes you pay in conjunction with investing in real estate when it comes time to file your taxes. You can also deduct what you pay in accounting and tax preparation fees. That’s a big reason to get the best tax prep help you can get.

Losses

Some real estate investors and business owners may experience net paper losses in the first couple of years. Those losses may be used to offset other earned household income. These essentially become credits against other income tax liability, and maybe rolled over to cover future year’s liability. Don’t overlook this one.

Property Management

It’s sad to see so many real estate investors running themselves ragged, taking on extra liability, and hurting their net profits all because they think they are saving by not using professional property management. Ironically those ‘costs’ can be a tax break too.

More Miscellaneous Expenses and Tax Breaks for Landlords

According to Landlordology and House Logic some of the other commonly neglected breaks for landlords include advertising expenses, payroll and commissions paid, property maintenance, insurance premiums, and legal fees.

Advanced Tax Strategies for Serious Real Estate Investors

While LLCs, SDIRAs, 1031 exchanges, and other asset protection tools can add another layer of tax write-offs and defense, and are frequently referred to as ‘advanced’, they should be utilized by far more investors. Don’t wait till you’ve got a big tax bill to try and fix the situation. These tools can open the doors to breaks for offices, vehicles, communications, education, and more, as well as shielding investors from taxes on gains so they can snowball and enjoy compounding results for decades.

Disclaimer: It is always crucial talk to your own individual licensed professionals for custom advice and to create a real tax strategy before making any financial moves.

Authored by Titanium Asset Protection

Titanium Asset Protection is an elite asset protection firm with licensed California attorneys on staff who specialize in asset protection, trusts, corporate law, succession planning, bankruptcy, real estate, and tax law. Our team has successfully represented clients to the highest levels of the justice system in fighting to protect them, and their finances, with lead counsel Matt serving as the Ethics Chairman for Le Tip International, The Chapter of Orange for 15 years, being an honored member of the revered Wealth Counsel.