Attorney Concepcion’s practice focuses on Personal Injury, Federal Criminal defense, and Real Estate Law. Attorney Concepcion formerly represented various large insurance companies and defended cases dealing with slip and falls, motor vehicle accidents, premises liability, negligence security, and wrongful death. He routinely represents clients facing charges of money laundering, international drug trafficking, embezzlement, conspiracy, and various types of fraud. Lastly, attorney Concepcion represents clients in Real Estate matters such as serving as a closing and title agent for residential and commercial transactions.
Here’s some of the topics we covered:
- How To Protect Yourself From Civil Litigation
- Victims Suing For Inadequate Security
- Knowing The Crime History Of Your Property
- Your Tenant’s History and Complaints
- Having Insurance In Place To Cover Liability
- The End Result Lawsuit Numbers
- Making Sure Your Follow You Own Rules
To Apply for The Warrior Program: Text CRUSH to 72345 and we’ll help you crush it in this business.
Please Review and Subscribe
Full Transcript Below
Intro
Hi. My name is Rod Khleif, and I’m the host of “The Lifetime Cash Flow Through Real Estate Investing” podcast. And every week, I interview Multifamily Rock Stars and we talk about how they built incredible wealth for themselves and their families through multifamily properties. So hit the “Like” and “Subscribe” buttons to get notified every Monday when a new episode comes out. Let’s get to it.
Rod
Welcome back to Multifamily Rock Stars. So as you guys know, this is where we interview people that are just flat-out crushing it in this business and we show you the insight scoop into how multifamily investors are creating massive success in their businesses and also in their lives. And as always, I’ve got my co-host who’s the director of my massive action team for the Warrior Group, Mark Nagy, on.
Mark
Pumped to be here as always, Rod. Happy to have another familiar face as a guest here today.
Rod
Yeah, absolutely. So we’ve got Leo Concepcion on today and this is going to be a little different. You know, it’s not going to be so much about multifamily progress, but Leo is– well, first of all, he’s a veteran, so thank you for that. He’s in the Marine Corps and he was in Iraq for that. And we live in the greatest country on Earth because of people like him. But he’s an attorney and his practices focus on personal injury and criminal defense and real estate law. And so why is he on? Well, this is relevant as it relates to multifamily ownership. So, you know, you’re going to have these slip-and-fall people in your properties and so we’re going to talk about that and how maybe to best protect yourself in that eventuality. Leo, welcome to the show, brother.
Leo
Thanks, Rod, and thanks for your comments there about my service. Much appreciated.
Rod
You bet. Well, it’s the truth. So why don’t you give us a little background on you? And, you know, I know you’re here in Florida, but talk a little bit about your background and experience and then we’ll get right into some strategies to help multifamily investors on the legal side.
Leo
Absolutely. So, you know, I’m a Miami native. I’ve been here pretty much all my life. I’ve been an attorney now for about ten years and I’ve been having my own firm for about three and a half going on four. I’ve been doing personal injury almost that entire time. I started on the defense side, so I worked for some of the bigger insurance carriers defending their insurance against personal injury claims in the auto and property space. So I’ve got the experience on both sides of that coin.
Rod
Okay, fantastic. You know, we had talked and, you know, because you’ve worked in personal injury, so you’ve worked with those slip-and-falls we’ve talked about and liability on-premises and, you know, negligence, you know, negligent security. You know, even– I hate to say it you know when people have died, wrongful death. And so, you know, let’s talk about if someone owns a multifamily property, how they might, you know, shore up the walls, you know, build the fort, you know, how they protect themselves from really civil litigation.
Leo
Absolutely, Rod. And, you know, it’s a very important part of this because you know, I’m a Warrior in your Warrior program, and I’ve talked to a lot of my fellow Warriors, and, you know, some of them, they’re very knowledgeable about this space. But this is a particular area where if you don’t have personal experience, you might have a real knowledge gap about what you are exposed to. So, you know, here’s a question that I always tell people, and I think it’s helpful for the listeners to maybe quantify in the head, is if I told you that as an owner of a multifamily building, you could be liable for a crime committed on your property, do you think that that’s likely?
Rod
It’s kind of scary to hear it. Why don’t you speak to it? How can it happen?
Leo
Yeah. A lot of people think, no, why would I be liable for a crime committed by someone else on my property? Well, unfortunately, that is actually a very common occurrence. Okay? And I challenge your listeners, no matter what state you’re on, what state you’re in, or if you have a building, go to Google and put in a negligent security attorney in your city, and you will see dozens of ads pop right up. Okay? And what these claims are basically about is it is someone who’s been the victim of a crime on a commercial premise, suing, right, and going after the property owner for having inadequate security. Okay?
Mark
Wow.
Leo
So let’s break that down a little bit of why that is, why that’s allowed, and what kind of responsibility that puts on the property owner. Alright? So for any kind of negligence claim, the first place we start at is, do I have a duty? Right? What’s my responsibility, if you will, as a property owner? Right?
Rod
Sure.
Leo
So as a property owner and, you know, I’ve got properties that I’ve you know, invested as well that I rent out. So as a property owner, I have a responsibility to keep that premise in a reasonably safe condition that includes, you know, material aspects of it, of, hey, floors and appliances and things like that. But it also applies to security on that premise.
Rod
Okay, let me stop you for one moment. So, you know, I want to go to security, but I also want to talk about livability. You know, one of the things when you buy an asset and you get you know, a lender involved, Fannie Mae, Freddie Mac, conforming lender as well. You know, one of the things they’ll look for is they’ll walk down the sidewalks, and if you’ve got a root underneath the sidewalk and it’s heaved and it’s heaved up, they’re going to require you to grind that down, which you should do anyway, because, again, somebody slips– or staircases that are loose, railings on staircases that are loose. So, you know, besides the security, there’s also that safety element that you need to contend with, because– you know, I’m sure you’ve had cases where that’s come into play. Correct?
Leo
100% Rod.
Rod
Yeah.
Leo
And I’m definitely going to talk a little bit about the most common ones I see all the time.
Rod
Okay, fantastic. Well, I’m sorry to interrupt then. Go ahead.
Leo
No, not at all.
Rod
We can start with security if you want to go there first. Sounds good.
Leo
Yeah. And there’s a real important point of why I want to talk about the security one that I’ll point out.
Rod
Okay.
Leo
But going back to the security issue, right? Security is part of these responsibilities, and the biggest component of you being held liable for these negligent security cases is what we refer to as the foreseeability of the crime. Okay? Now, when I talked to clients, and especially when I was on the defense side that I had these cases, everyone would always– this is where they kind of started screaming at me. They go, how am I supposed to know that someone’s going to commit a crime on my property? I have no control over that.
Rod
Right.
Leo
Well, I understand that and I feel for that, what the law does is it looks at the history of the property. Right? So what do I do as a plaintiff’s attorney now when I have one of these cases? The first thing I do, I look up the property address, I contact the police department, and I get what’s called the CAD, the Calls and Dispatches to that property, for emergency services. And I usually do that for about a three-year window. Now, if I go to that and I see pretty consistent criminal activity on that property, that’s going to be a good argument for me to say this was a foreseeable instance, right?
Rod
Yeah.
Leo
And also, so just as an example, if you’ve got a property and every two weeks when it’s payday, you have break-ins or you’ve got some kind of robbery, right, you can pretty much predict that it’s going to happen again unless you take some kind of action. Right?
Rod
Yeah.
Leo
And Rod, you know about this. I just went to the Warrior program up in Sarasota with you a few weeks ago, and you mentioned that you had a property, that you talked to one of the tenants and they were mentioning they were having car break-ins. And you found that there was some kind of gap in a fence. And you automatically went and said, we got to fix that.
Rod
Now, let me speak to that, actually. That was our Nashville asset. And yeah, we’re actually– believe it or not, it’s a fence in these trees. We’re putting razor wire up so they can’t get through anymore because that’s a– I think there were homeless people coming through there. But on that asset, to mitigate what you’re describing here, the first thing we did is we enhanced the lighting. We put LED lighting, bright lighting throughout the whole complex. We’ve fixed the front entry gate, so you have to use the gate to come in now. We just ordered 200 cards for entry for the gates, for the residents. We put in a whole camera system throughout the whole complex, you know. And these are the sorts of things I’m sure that you would you know recommend, you know, in a situation like that where you’ve got issues. Now, we believe– you know, we do that on every asset. We throw cameras in on every asset, enhance the lighting, and try to secure the perimeter as best we can. That’s just what we do. You don’t have to do that. But I’m sure you would agree that those sorts of moves would mitigate, you know, negligent liability regardless of what you find on that CAD report. Yes?
Leo
Absolutely. And especially if they’re done in response to something, right? That’s something that’s viewed positively, right? If you have an instance and you go, hey, we’ve got to beef this up. Right? And look, the things you’re talking about are all the normal security things that anyone’s going to look at, which is controlling access points, right? Increasing visibility, so there’s not– the ability of someone hiding or doing things unseen. Right?
Rod
Right.
Leo
Those are all positive things that you’re already talking about. That’s just a matter of good property ownership. Right?
Rod
Right.
Leo
But what I would tell you know, my fellow Warriors and people listening to this, this is a part that sometimes when we’re looking at these deals, you know, it’s just an afterthought and it can’t be, right? Especially once you have the asset. You really have to take a look at this, right? And here’s the really important reason why. Okay? And I’m going to give you a little bit of my thought process as a plaintiff’s attorney and all plaintiff’s attorneys because, at the end of the day, this is our business.
Rod
Right. So as you guys know, the plaintiff is the one suing your ass for whatever happened on the property, okay?
Leo
Absolutely.
Rod
So he’s on the nefarious side here. You know, we won’t hate him for it because he’s got to make a living, but that’s what he’s coming in at now.
Leo
Absolutely.
Rod
Yeah.
Leo
But what I’m always looking for is who’s my pocket? Who’s going to pay if I–
Rod
Always do for the deepest pockets. That’s right.
Leo
Right. I’m always looking for who’s going to pay even if I have the greatest case in the world and I win, who’s going to pay because I don’t want a piece of paper that says I’m owed a million dollars that no one can pay.
Rod
Right.
Leo
Right? So when you have maybe a car accident with a little lady that she’s got nothing to her name, there’s not much to do there.
Rod
Right.
Leo
But when we’re talking about commercial assets, right? We all know you’ve got to have some equity in these deals to get them, right?
Rod
Sure. And you’ve typically got some pretty decent insurance as well.
Leo
Here’s where the big point is. You’re kind of foreshadowing my biggest point here for your listeners Rod is, so I’m always looking for that biggest pocket. My preferred is insurance, but I’ll take a property owner on a commercial property that has equity any day of the week as well.
Rod
Sure.
Leo
So this is why owners of multifamily are at particular risk here because you’re not an indigent defendant that I’m just going to walk away because I don’t think you can pay. You can pay, right? If I win, I can lean this property and whenever you sell it, I’m going to get my money. Right?
Rod
Right.
Leo
And these kinds of claims, I mean, you can imagine, right?
Rod
Sure.
Leo
Someone gets robbed in a violent crime, they get shot.
Rod
Sure.
Leo
Right? Like you said, unfortunately, a wrongful death, those kinds of claims are in the millions.
Rod
Right.
Leo
They can evaporate all your earnings on a property in a one-fail suit.
Rod
And exceed any liability coverage that you have on the asset as well. And of course, insurance companies do everything they can to try to get out of paying a claim. I’ve got a claim right now, 750 grand on this Hurricane E, and they just came back at 140. Okay?
Leo
Yeah.
Rod
My public adjusters are at 750. They’re at 140. This just happened an hour ago. That’s why it’s fresh. And so their job is to get out of a claim. So you’ve got that component as well, right?
Leo
Absolutely. And here’s the real takeaway that I want all your listeners to understand, which is your point is, hey, listen, you know, these claims happen, you’re going to have insurance. But here’s the problem. This is at least the case in Florida. These claims have become so pervasive and they’re so expensive that the majority of insurers in Florida have now started excluding them.
Rod
Excluding. No kidding. Oh my God.
Leo
So they have what’s called a battery or sometimes a firearm exclusion or sometimes it’s referred to as a sublimit. Okay?
Rod
Okay.
Leo
So what does that mean? Let me go in and break those down. If you have a battery exclusion on your policy, right, everyone gets a general liability policy on their property.
Rod
And somebody gets assaulted.
Leo
Right. If the injury that you’re being sued for is a result of a battery, a battery is basically a physical act, right? And that’s, you know, a stabbing, a shooting, an assault just with hands and fists?
Rod
Right.
Leo
Your insurance company is going to go, oh, look at that page. It says we don’t cover those claims and you’re going to be without insurance.
Rod
Wow.
Leo
Okay?
Rod
Wow.
Leo
So this is key because when I went to the Warrior meet-up, I was talking to some of my fellow Warriors and I brought this up and they go, I thought that battery thing had to do with something with like, actual batteries. I didn’t understand what that was.
Rod
No kidding. Wow.
Leo
So this is what’s so risky about these claims. And what I really wanted to bring to your listeners’ attention is that you know you want to take steps to try to prevent these claims, obviously, right? But the one thing that you want to do 100% for sure because not every claim is going to be avoidable, is to make sure you have insurance coverage that will cover this. So you’ve got to look at your policies and make sure you do not have a battery or firearm exclusion or a sublimit. A sublimit means that sometimes your limit is a million dollars. But then they’ll say, well, but if it’s a battery, it’s $25,000. That’s no good for you either, okay?
Rod
Sure.
Leo
So you’ve got to look at your policy, and if you have either a sublimit or an exclusion, you need a cut on your horn with your insurance company or your agent and say, we need to amend that and add that in. The insurers will add it. They just will charge you more.
Rod
Yeah.
Leo
But you need to have–
Rod
But it’s insignificant in the overall scheme of things. It’s not that much more, so, you know, this is really sound advice, buddy. Thank you. This is really sound advice.
Leo
Thank you. And this is what I wanted people to understand because I would venture to say that there are a lot of teams out there right now that are exposed, and they don’t even know it.
Rod
Yeah.
Leo
They don’t even know it. And this is the last point I’ll bring up on this security part, Rod, and then we can talk about some of the other claims that are more common. Not only do you have to keep in mind about third-party people coming onto your property, right, and victimizing your tenants and your guests, but you also have to be very mindful of your tenants, okay, and complaints about your tenants. In Florida, right, if you have a problem tenant and someone complains about them, hey, this guy’s threatening me, this guy’s harassing me or lady, and you don’t act and something ends up happening, that will be a basis for liability, I’ve had that exact case, and I’ve succeeded. I’ve gotten a recovery on that. So, you know, sometimes, you know, people don’t take those claims as seriously as they should. Do not underestimate those instances when you have a complaint, you have a duty to– you’re into it–
Rod
You have to be responsive. Yeah.
Leo
Yeah. And if you think there’s something there, do not be passive. You need to take a process to get that person out, okay? Because it can open you up to liability.
Rod
Yup. No, that’s also great advice, buddy. I absolutely– guys, you know, if you have something happen with a tenant that messes with other tenants and creates that sort of a situation, shooting, argument, fight, anything, you need to take action and get them out of there. That’s it. Bottom line. Yeah.
Leo
Yeah.
Mark
So what can be done proactively here, Leo? You mentioned checking your insurance. Rod talked about lighting, fencing, et cetera. If you were buying a building today, what would you go do to it? Or if anything, if there is that you can do to help avoid these things in the future?
Rod
Yeah. And obviously, check your insurance policy for these exclusions, so, you know, all the things he just mentioned, plus that. Is there anything else you can think of?
Leo
Right, and this can’t be repeated enough. The number one thing is checking your insurance. Right? Because like I said, even if you’re the best landlord, like maybe Rod here, he’s still going to get a claim every once in a while. It’s just unavoidable.
Rod
Right.
Leo
So the best thing you can do to protect yourself is to have the insurance coverage in place because the insurance is not only going to pay for the possible damages in the claim, but they’ll pay for your legal defense, which can be incredibly expensive. Okay?
Rod
Right.
Leo
So that’s one.
Mark
You would know.
Leo
Yes. So some additional things that can be done to help is when you first get into a property, is what I would recommend is, getting the calls for service to your property so you know what is going on in your property.
Rod
That’s a really good idea. And they have to give that to you, correct? To the CAD?
Leo
Yeah, it’s a public record. It’s a public record.
Rod
Okay.
Leo
At least in Florida, we have what’s called the Sunshine Law, which is basically all public records are accessible to the public just upon request.
Rod
Okay.
Leo
And you just contact the police department and say, I just want to get the calls for service to this address for the last three years.
Rod
Love it.
Leo
And from there you’ll see just preliminary what’s going on and they’ll break it down. Property crimes, you know, assault and battery, robberies. Right? And if you see some in there that are specifically worrisome, you can get the full reports and see exactly what happened. Okay?
Rod
Nice.
Leo
So that’s a second step that I would take. And then based on that, right, you can determine what needs to happen. Do I need to–
Rod
Oh, some mitigation. What can you do to mitigate, right? Based on what you find.
Leo
What can I do to mitigate this? Right?
Rod
Yeah.
Leo
There are experts that you can hire to make recommendations if you think it’s rising to that level or just simple mitigation things. Now, here’s a comment I’ll make that’s very important that piggybacks on what Rod said, the lighting, the security, all that stuff. You have to make sure that when you put those things in place, you maintain them. Nothing will give me as a plaintiff’s attorney a better argument than lighting that’s in place, but not working. Okay? Because it shows that you know that there’s a need for it, but you fail in your duty to properly maintain it. So if you have security checkpoints but they’re not working and everybody just walks in, you’re really shooting yourself in the foot. If you have security lighting and you’re not maintaining it, and you have a bulb that’s been out for two months and something happens in that area, that’s going to be red meat for me in my arguments that you’re failing in your duties as a landlord. So when you put these things in place, you have to make sure you maintain them. This goes as well for security devices, locks, in your units. Do not take lightly a complaint from a tenant that a window is not closing or a door is not locking because God forbid, that’s the entry point for a crime, and that is going to be a really bad fact. So you have to be very proactive and timely when you get complaints about security devices not working on your property. Locks, windows, lighting, okay?
Rod
Okay. Good.
Leo
Those are the most important things you can do proactively, right?
Rod
We’re not trying to scare the hell out of you guys, but the bottom line is you do it right. I mean, these are things you should do anyway to protect your residents and offer them clean and safe, you know, a place to live. And, you know, this is just part of this business. So it’s super important. So we talked about security. Now, let’s– I forgot what the other piece of this was. What was the other piece of this that we wanted–
Leo
I think we were talking about just other more common liabilities and claims.
Rod
Okay. Yeah. Let’s go there. Yeah.
Leo
And I’ll tell you the most common one, right, for me on properties is either slip and falls or trip and fall.
Rod
Oh, that’s right. Slip and falls. Yeah. Okay.
Leo
Yeah. So here’s the biggest one. And I say this almost– I almost don’t want to say it because I get so many of these cases, but I’m going to give it away here. Here is, at least in Florida, the biggest cause of slips and falls that I get on residential properties or even just regular commercial properties.
Rod
Yeah.
Leo
We get landlords out. They’re good landlords. They want to improve their property. They want, you know, to make it look better. And one of the things they’ll come in and do is if they’ve got a concrete walkway, they’ll paint it. Okay? And I think you know where I’m going, Rod.
Rod
Oh, sure. You’ll slip and I think it’s wet at all and paint, you’re going to fall.
Leo
They don’t use slip-resistant paint. There’s a special paint that needs to go on exterior walkways that gives the floor almost a sandpaper, rough feel.
Rod
Yeah.
Leo
If anyone listening, if you’ve got a property, next time you go out to your property, if you’ve got a painted concrete walkway, run your hand over it. If that doesn’t feel like sandpaper, you’ve got a dangerous condition on your property. Because in those cases, and I get them all the time, what I do is I hire an expert. He takes out a little robot that tests the friction of that floor when wet and he goes, it’s too slippery. It’s not appropriate for an exterior walkway. Okay? So while I understand where property owners are going, they want to improve the aesthetic appeal of the property, they’ve got to make sure that they do it right and get the right kind of paint. Because if you don’t, you create a slick surface that someone’s going to fall on and it’s going to be an automatic claim. And those are claims that I’ve made a lot of money on those claims.
Rod
No kidding.
Leo
They happen all the time.
Rod
Wow. You know, and then of course, like you said, there’s the trip and fall, too. We’ve got a tripping hazard, you know, a stairway, sidewalks where roots have come in and heaved sidewalks. That’s super common. And you’ve just got to grind those down and or take out the root and completely redo them. We’ve done all the above.
Leo
Yes.
Rod
I know there’s another one.
Mark
The biggest thing Rod on those trips and falls is when you’re walking your property, which you should do regularly, right? You want to look for changes in elevation, right? Either from one you know, paved surface to another, because the magic number for me as a plaintiff’s attorney is a quarter inch. If there is a quarter-inch difference in elevation between two surfaces and they’re not properly kind of warmth, right, or delineated by color or something like that, that is a textbook tripping hazard. Right?
Rod
Okay.
Leo
And, you know, I can throw a ball in the air, and I’ll hit an expert that will testify that that’s a tripping hazard. So you’ve got to look for changes in elevations and walking surfaces, and the quarter inches is the number you want to be careful for.
Rod
Love it. Okay. Don’t love it, but I mean, love that we’re talking about it. Yeah, so let’s talk for a minute– you know, and by the way, and I’m sure you know you’re aware of this, there are professional litigators that make a living falling– I mean, I’ve seen pictures of somebody– with a picture in a living room where they’re on a couch and they’ve got a piece of drywall on them like it fell, and somebody said, we’ll snap a picture you know, just some of the stupidest crap you’ve ever seen. But let’s talk about pool claims. Let’s say you’ve got a pool on an asset. Let’s talk about that. I also want to talk about dog animal claims, dog bites. But let’s talk about pool first.
Leo
Yeah. So listen, I’ve had the unfortunate luck of being involved in some serious pool claims when I was on the defense side, and pool claims are very fragile.
Rod
Like a child fell in a pool. Oh, good, God. That’s my worst nightmare. Yeah.
Leo
Yes. Here’s the number one thing that you will have to be aware of about pool claims. This is less common nowadays because technologies have advanced, especially in Florida. I’m not sure about other states, but the biggest worry for me on pools, for landlords that they need to be aware of are what’s called entrapment cases, which are old pool pumps, okay, that have not been updated–
Rod
Oh, that sucks you down into that thing. Yeah.
Leo
And have very strong suction devices. And unfortunately, small children, even adults, I’ve seen adults, if they stick a hand in there or a foot in there, they can become entrapped in the suction mechanism, and it’s almost impossible to pull them out by force, even with an adult pulling.
Rod
Wow.
Leo
Technology has advanced where they have anti-entrapment devices, which is, there are sensors on some of these pumps now that if something becomes entrapped and the pressure goes up, it automatically switches off.
Rod
Wow.
Leo
But not all pools have that.
Rod
Right.
Leo
So if you have a pool on your property, you should ask your pool tech, do I have an anti-entrapment device on this? If you don’t, you need to change that. You need to change that right away. Right? The cost is not insignificant, but it’s not astronomical, and it’s an incredibly important safety [inaudible]
Rod
Forget the financial aspect. You don’t want to go to sleep at night knowing you could have done something and a child died or something like that.
Leo
Absolutely.
Rod
There’s nothing– I can’t even imagine anything worse than that. So that’s just kind of a must-do. In fact, you’ve just given me– I wasn’t even aware of that. So I’m going to reach out to my assets that have pools and have that double-checked because that’s my worst nightmare right there.
Leo
That’s common nowadays, Rod, because, again, a lot of them have been changed, but there’s still some out there. So you want to make sure–
Rod
What about like, perimeter fencing and obviously access to the pools as well, right? That’s a big deal.
Leo
That was going to be my next point, Rod, which is you’ve got to make sure that you’ve got limited access to the pool and you’ve got some kind of security barrier. Right? And why is that? Because not to get too much into the weeds of the legal aspect of it, but a pool is what’s called– in the law, an attractive nuisance. Okay? Which means that just by its very nature, it’s going to attract people to it, right? Kids, teenagers, things like that. People that shouldn’t be there, even people that have no right to be there, trespassers, okay? But the law basically says because it’s such an attractive nuisance like that, you can’t just throw your hands up and say, well, you’re a trespasser, I don’t really owe you a duty. You have to take steps to prevent access to it. Right? So you have to have self-closing gates, okay? Self-closing gates, right, some kind of perimeter around it, right? Safety devices in the general area, right? Those floating devices, sticks that you can give to someone if they’re struggling to stay afloat. And you have to take steps to make sure that people who don’t have access to it or shouldn’t have access don’t get it. Right? You can’t be lax about that and say, oh, people should know better. Not with pools. You’ve got to be more conscious.
Rod
And they could be non-residents, just trespassing, and if they drown, you could be liable. It’s insanity. But, there it is.
Leo
That’s exactly my point with the attractive nuisance doctrine, right? You know the law has different standards for duty for the property owner depending on the status of the person on the property, be it an invitee, right, or a trespasser. Pools, right, under that attractive nuisance thing don’t have the same effect because again, the law acknowledges that people are going to come to it even though they’re not supposed to. Right?
Rod
It gives them a pass. Interesting.
Leo
To a certain extent, yeah. So you’ve got to be very careful of pools.
Mark
You’ve mentioned a few things here, right, tripping, pools, battery, et cetera. So the listeners know kind of the seriousness of this. What are some of the bigger numbers that you’ve seen that have had to come from owners for some of these things so the people listening actually understand what the repercussions of this–
Rod
Now you’re going to scare the hell out of them, Mark. Okay.
Leo
Listen, Mark, I don’t want to scare anyone, right? And it’s not my intention. It’s really just to people have the knowledge and they’re better prepared to hopefully prevent these claims. But I don’t want to see people get hurt either. But look, the negligent security ones are the scariest because in serious claims, they’re multimillion-dollar claims, right?
Mark
Yeah.
Leo
Unfortunately, you know, in big cities, right, at least in Miami, we’re a big city, so we have you know, rough neighborhoods. And multifamilies in those neighborhoods you know, have been hit for multimillion-dollar judgments on wrongful deaths. Right? You know, I can tell you I’ve been a part of several multimillion-dollar claims against properties, right, that either someone’s been shot on them or someone’s died on them, or they’ve been you know, the victim of a very violent crime. So those can get up there, the slips and falls and trips and falls, those are more relevant to just the injuries. Now, the good thing on that is most insurance will cover that. I’ve never seen an exclusion for a slip and fall and trip and fall.
Rod
Right.
Leo
Right. But those can be substantial. You know, look, I just perfect–
Rod
If somebody throws you know, hasn’t had an MRI to show that they had lumbar problems before, then they have an MRI and they, oh, they’ve got a slipped disc that could have been there for ten years, but there’s no way to tell. And of course, then you’re going to pay for it. Now, the other piece that I do want to mention here that I know you know and I know is that 99% of these settles, okay? Even if there’s no insurance and they’re suing a home– a property owner, you know, you have– it becomes a financial decision. Do I stroke a check for, you know, even if you think you can win, sometimes it makes more sense to stroke a check for 50,000 or whatever because you’re going to pay more in legal fees to defend it than that. And so, you know, I’ve been in cases like that where I’ve settled because it would have cost me more to fight it. So there’s that piece as well, right? Would you agree, Leo?
Leo
That’s 100% true. And this is why going to the negligent security part, Rod, is so important you make sure that you have the insurance in place, right? Because even if it’s a claim that you go, I’ve got a great defense, I really don’t feel that we did anything wrong here. Look, the average, at least in Florida, in Miami, to defend the case from inception through jury trial–
Rod
In a quarter million?
Leo
I would say easily 100 to $150,000 on the cheap end.
Rod
Oh, that’s not bad.
Leo
On the cheap end, though.
Rod
Okay.
Leo
But depending on how complicated the case is, it can rise, right? Because you’re not only paying for the attorney fees, which are substantial. I mean–
Rod
Right. Oh, depositions, the expert testimony, you know all of that can cost money. Yeah.
Leo
That’s the real killer.
Rod
Right.
Leo
You’re going to need doctor experts, liability experts, and if you think our attorneys are expensive, you know, the experts leave us in the dust. They’re like [inaudible].
Rod
They’re ridiculous. You know, as I was mentioning before we started recording, I used to own a litigation support company. I was helping families save their homes in a big crash. That’s what I did after I lost everything and it turned into a big company. So I know a lot about the business. And, you know, I’ve been around for a long time, so I’ve been sued for stuff like this, you know, stupid stuff like this. Some of it had no merit. Some of it had merit and we settled and whatnot. But let’s talk about dogs for a minute before we conclude this part of the conversation.
Leo
Right. So dog bite cases are another one that is worrisome because a lot of them are excluded by insurance, just like the negligent security. So if you have a property that you make a decision that you allow dogs, right, and you allow tenants to have dogs and maybe they pay a fee and stuff like that, right, you want to make sure that you look at your policy and that you have coverage for dog bites, right? Because most of them will exclude them, right? You can add it, but you want to make sure you add it. Because the most common issue with the dogs is going to happen in the common areas, right? Someone walks their dog, it gets off leash or even on a leash, it bites someone, right, it jumps on one and knocks them over. I’ve seen those as well.
Rod
It can kill them. I mean, you know, you got extreme cases, God forbid, it’s small child, it’s horrific, so, you know, and certainly maul them and permanent damage to faces and skin and everything else. So, it’s a big deal.
Leo
Absolutely. So, you know, the things to consider regarding you know, canines on the property is, you know, really be purposeful about how you’re going to set up your rules. Are you allowing all dogs–
Rod
Let me say this. Here’s what I would suggest is that you have weight limits on your dogs and you strictly adhere to those so that you don’t end up with Rottweilers and Pit bulls and German Shepherds and Dobermans, so you know, that you have little Terriers and Chihuahuas and stuff like that. Do you agree, Leo?
Leo
Right, that’s exactly what I was going to say, is you have to establish a criteria for what you’re going to allow, right?
Rod
Yeah.
Leo
I mean– and look, that’s up to each property owner. The norm is for a multifamily unit, is that you have medium to small dogs. Very few of them allow large dogs. And it’s probably not the best idea to have like you said, a 90-pound Rottweiler.
Rod
I’m just going to tell you right now, guys, don’t do it. Don’t allow large dogs, period. Just don’t do it. It’s not worth the risk. That’s my opinion.
Leo
Yeah. Then, the further component of that, which is what you said, Rod, is you have to adhere to your own rules, okay? Nothing hurts a property owner more, kind of like we just talked about in the negligent security as well is than having something in place and not enforcing it or not maintaining it, right? So if you have a weight limit, if you have a criteria, enforce it, because if someone has a dog outside of the criteria and you don’t do anything about it, then something happens, that’s a firm, solid reason to go after the property and then go, you’re not enforcing your own rules.
Rod
Right.
Leo
And because of that, so and so was hurt. okay? The same thing is leash rules. Enforce leash rules outside in the common areas. Right? That’s going to be the way that 90% of dog claims arise is that someone takes their dog out and they go, oh, no, he’s really good, she’s really good. They can be off leash, and that’s when a bite happens, a jump happens. If they’re on a leash, it reduces those claims significantly. Right?
Rod
Yeah.
Leo
Very rarely do I see a dog claim where it was on a leash. It’s always off-leash.
Rod
Okay, well, now that we’ve sufficiently scared the hell out of everybody, let’s talk about multifamily for a minute outside of that. How’s your progress coming? How long have you been a Warrior? I forgot to ask.
Leo
So, Rod, I think my wife and I have been a Warrior for about four months now.
Rod
Okay.
Leo
You know, and it’s been great. You know, we were just talking about it the other day after talking to some friends, and we were just saying how our knowledge in the area has grown so much from a couple of months ago. And it was great to notice that, right? It was a little intimidating at first when you’re kind of trying to absorb all this new information, you know, but some of the things are starting to click, and we’ve just gained so much knowledge in that area and so much confidence in it. You know, I was sharing with you that you know, we’re doing some last-minute number crunching, but we may be making our first offer on a building here in Miami next week.
Rod
Congratulations. That’s freaking awesome. By the way, guys, if you’re listening and you’re interested in applying to our Warrior program, this is the caliber of people we have in there. It’s the most extraordinary group I’ve ever been associated with. If you’re interested in applying, text the word “crush” to “72345”. You know, we check you out, you check us out. But again, text the word “crush” to “72345” to apply to our Warrior program. But listen, Leo, I really appreciate you coming on because you just did this out of the kindness of your heart to add value. There’s really no other motivation for you on this. So it really means a lot because you actually had to push me because I was like, yeah, I don’t know. You know, you haven’t got any deals yet. I don’t know if I want to talk about– you can’t talk real estate so much, but, man, you’ve added tremendous value today, brother. So I’m really glad you pushed and that we had [inaudible], my friend. So thank you very much.
Leo
No, thank you for having me on, Rod. And look at it, I want to obviously, let some of your listeners know, if you’re part of the Warrior program and you have a question about any of these things that I just talked about, by all means, look me up. Give me a call, say, hey, Leo, I’m part of the Warrior program. I got a question about this. I’m happy to take a call, you know, talk to you, maybe even look at your policy, if that’s what you need help with. Okay? So, you know, I’m trying to be a resource to people.
Rod
I appreciate that.
Leo
If it’s needed, I’m here for you guys.
Mark
Awesome.
Rod
All right. Well, I appreciate it, my friend, and happy holidays if I don’t talk to you soon. Mark, I’ll see you later, brother.
Mark
Alright. Thanks, guys.
Leo
All right. Thank you, Rod.
Rod
All right.
Outro
Rod, I know a lot of our listeners are wanting to take their multifamily investing business to the next level. Now, I know you’ve been hard at work helping our Warrior students do just that using our “ACT” methodology which is Awareness, Close, and Transform. Can you explain to the listeners how they can get our help?
Rod
You bet. Guys, we’ve been going non-stop for three years building an amazing community of like-minded people, and our coaching students which we call our Warriors have had extraordinary results. They’ve purchased thousands and thousands of units, and last year we did over 1,000 units with our students. And we’re looking to grow this group and take it to the next level. We’re looking for people who want to follow a proven framework that’s really step by step and then leverage our systems and network to raise equity, to find and close deals, and to build partnerships nationwide. Now, our Warrior community is finding success in any market cycle. So if you’re interested in finding out more about how you can become more of our incredible network and take advantage of the incredible opportunities that are coming very soon, apply to work with us at “MentorWithRod.com” or text the word “CRUSH” to “72345”, and we’ll set up a call so you can check us out and we can check you out. Again, to apply, text “CRUSH” to “72345”.
