Does it make sense to incorporate your RE for liability reasons in Canada?

Leveraging, renting vs owning, making an investment or buying a home?
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HoTiCE
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Does it make sense to incorporate your RE for liability reasons in Canada?

Post by HoTiCE » 23 May 2017 09:27

Honest beginner question.

Purely from a liability standpoint (forget the taxation aspect), does it make sense to incorporate small (12 and under) multifamily RE in Canada considering our litigation landscape isn't as crazy as the US and the fact that most insurance policies cover up to 1M (even 2M in my case) in liabilities?

You dont see crazy multi-million dollar payouts here ever in Canada from tenants suing their landlords.In the US, this is a no-brainer. If you own bigger buildings, I could also see myself doing it but for smaller units, does it even make sense?

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kcowan
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Re: Does it make sense to incorporate your RE for liability reasons in Canada?

Post by kcowan » 23 May 2017 15:37

IANAE in RE but it seems to me that incorporation is exactly what big developers do on every major project to isolate them from other corporate assets. If you mix in other assets, you are doing it at your risk. That will depend on the likelihood of a successful litigation, which is for sure lower in Canada.
For the fun of it...Keith

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Re: Does it make sense to incorporate your RE for liability reasons in Canada?

Post by active » 24 May 2017 23:39

It protects you also from environmental liabilities that run with the land, not covered by your insurance.

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