Legal Question in Business Law in Ohio
My father has a LLC that owns a vacant building. I'm interested in opening a martial arts school at that building however, I would also be teaching something known as Martial Arts Tricking as well which is an acrobatic derivative of various martial arts with some gymnastics influence( if you want a better idea just search 'Tricking" on youtube). I'm considering starting a LLC myself with another person who would also be a Tricking instructor and renting the property off of my dad. I understand the basics of limited liability and what could make me specifically liable but would this at least absolve my dad of any responsibility if there were some huge lawsuit? Would this affect his company with him just technically being a landlord? Even if I owned stock in my dads company?
2 Answers from Attorneys
Generally speaking (I'm not giving you legal advice and no attorney-client relationship is being formed by my answer to this question), a landlord limits his or her liability by the terms of the lease with a tenant. Tenants may be asked to indemnify or hold harmless a landlord from any and all lawsuits brought because of the use of the property. The fact that you'd be operating as an LLC wouldn't absolve the landlord from liability, the specific terms found in a lease agreement would.
Assuming someone sued because they were injured on the property, they could name the Tenant and the Landlord under various theories of fault, including negligence or dangerous conditions of either the building or the activity. The Lease could transfer responsibility for all claims to the tenant, but that doesn't stop the injured person from naming the Landlord or possibly finding a claim that stands. There are several ways to limit exposure though. Both of the LLC's help. A good lease helps. The Tenant taking responsibility in the lease for inspecting the premises, taking it as is, and building out the space in a safe and appropriate manner helps. Proper waivers and agreements help. Insurance helps, especially if the Tenant insures the building and the Tenant's insurance names both the Tenant and lessor. Nothing is full proof, though. Where will the school be? My kids are interested.
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