What is the potential liability of a motel owner who lives out of the country and is not a citizen of the US?

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What is the potential liability of a motel owner who lives out of the country and is not a citizen of the US?

We are UK residents thinking of investing in a mini-motel room in the US. We will get the appropriate insurance. However, for example, if a claim was made and the insurer wouldn’t cover the claim for some reason would our assets in the UK be vulnerable or would it just be any assets in the US?

Asked on January 27, 2012 under Business Law, New York

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Good question. If you invest in a mini-motel in the United States where a lawsuit arises from an incident occurring at the unit you bought during your ownership of it and a judgment results against you where any policy of insurance does not afford complete coverage, all of your assets would be subject to the judgment and a levy, including those in the United Kingdom.

This is why you might consider creating a corporation or a limited liability company to hold title to the mini-motel that you are seeking to buy created under the laws of the state where the property is located. This would help create a form of insulation against any personal liability from any judgment arising from the ownership of the property.


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