UPDATE ON PROPOSED House Bill 4463 – Would Allow LLCs to Evict wi
thout Legal Representation.
House Bill 4463 was introduced in March and referred to the committee on law and justice.
The Bill would allow owners of a single-member LLC (or a married couple under certain conditions) to file their own eviction actions on behalf of the LLC witho
ut the need for legal representation.
If the Landlord is seeking money damages, the amount, not including taxable costs, must be under the small claims Court maximum.
Back in May, the Bill came out of the committee on law and justice and
a substitute bill was referred for a second reading.
Just 8 days ago the substitute was adopted. Yesterday the Bill was
referred to the Judiciary Committee.
The Major Difference in the Substitute Bill as Adopted.
The major revision that came out of the committee affects property managers.
The Bill as introduced would have allowed property managers or agents to represent the LLC under certain circumstances – e.g. – having personal knowledge of the relevant facts related to the Property and tenancy.
That language was removed from the first version of the bill.
Under the substitute bill, Property Managers or other Agents would not be allowed to represent the LLC.
Further, this is a “burden shifting” mechanism in the substitute bill – the law would place the burden on the LLC owner to prove he or she is in compliance with the statute. That makes sense – since the legislature would be creating an exception to the rule – only lawyers practice law.
A Divisive Issue: To be, or not to be your own lawyer?
I commented that I would be surprised if this bill passes, although other states have similar laws. The reason I was surprised is demonstrated a legislative analysis that came out just a few days ago.
A recent Legislative Analysis highlights the extreme opposite view points – those expressed by Real Estate Investors and Real Property Owner Associations, and those of Attorneys and Judges.
To Hire an Attorney or Not?
As I stated in my last post, the Bill makes sense for Landlords who want quick and cost-effective resolutions. I understand that an Investor who is not making money on a tenant also doesn’t want to expend additional legal fees to evict a Tenant. This is particularly true since the most attorney fees that a Landlord can recover against a residential tenant is limited to the statutory amount (currently $75).
All business owners make this same business decision –
at what point can I handle a legal matter myself and at what point do I pick up the phone and call my lawyer?
However, I will refer readers back to the lawyer who has a fool for a client…
Questions? Comments?
e-mail: Jeshua@dwlawpc.com
Twitter: @JeshuaTLauka
Purpose Driven General Counsel 