Protecting Your Real Estate: How to Better Protect Your Real Property Assets from Unrelated Creditors

Protecting Your Real EstateIt is common for doctors and any other party who invests in real estate whether for a commercial medical building or other commercial/residential rental property, to lump all of their buildings into one entity. Each piece of real property, however, should be titled in a separate business entity, typically an LLC. LLCs provide benefits for real property holdings that other entities may not.

The separate entity provides specific protection against outside claims. However, if multiple properties are held under one entity, then any liability that arises with respect to one property can also expose the other properties to a creditor’s claims and the assets of the entire entity would be exposed. For example, in the event of a tenant lawsuit, a slip and fall, or some other kind of claim against one property, the creditor or plaintiff could reach everything within that entity since it is also the legal owner of other properties.

Continue reading