Q: Question related to potential liability following a sale of a real estate property
I own a property that was remodeled but the work was done without the proper work permits and an inspector came and posted a stop work notice on the property. Bringing the property up to code required a significant financial investment as the work that was done was extensive and it was almost completed at the time the county inspector posted the notice. I transferred the ownership of the property from my own personal name (to which was initially titled to) into a LLC and I sold the property with the LLC being the seller (I signed the closing statement as an LLC member) the code violation still being in effect. Can I be held personally liable by the buyer after he will discover the issue with the remodel being done without permit given that the seller of the asset is the LLC and not me personally?I know that there is an issue with veil piercing of a LLC - is this something that can occur here?
A: Anybody can sue anybody for anything, and the person being sued will have to defend. There are various means and legal theories to pierce the company veil and reach the owner, but they all depend on a set of facts that your post doesn’t detail. You want a whole dissertation on all the ways the buyer might sue you personally, and all the defenses to those claims you might have, and a set of odds as to outcomes? It’ll cost you a fortune in legal fees to find out in a vacuum of facts. Wait and see if the buyer makes a claim and see what exactly the claim and legal theory is, then get a lawyer. Trying to “what if” this thing is foolish, and a waste of time and money.
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