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Whenever you engage in any business activity, especially real estate investing, there is a chance that you might get sued. Find out what steps you should take right away if this happens to you!

DISCLAIMER: please note that the information contained in this video is for educational and entertainment purposes only. You should always consult your own attorney before making any legal or financial decisions. This video is not intended to and does not create any attorney-client relationship between the content creator and the viewer.

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If you find yourself on the wrong side of a lawsuit, don’t panic. There are things you can do right away to manage the situation.

The first thing you should do is actually read the documents you were served with. Yes, it sounds basic, but so many people don’t even bother to read what they receive, it is mind blowing. Sure, you can put it on your attorney to read everything and explain to you what the lawsuit is about and what it all means. But, I think as a business person and as a real estate investor, you should take the first initiative and become an educated consumer. It doesn’t mean that you need to earn your law degree. In fact, nothing that I suggest requires advanced knowledge of the law. But, it does require your focus and attention.

So, what should you be looking for when you read the complaint or the petition with which you were served? First, you should note who is suing you and determine whether you or an entity (an LLC, corporation, etc.) that you own is one of the defendants/respondents in the action. You would do this by looking at the “caption,” which is usually found at the top of the first page of the document you were served with. The caption will tell you who the parties are, as well as what court or administrative agency the complaint is brought in.

Once you confirm that you, or your entity, is in fact a defendant/respondent in the lawsuit, you should continue reading and specifically pay close attention to the section of the document containing the “facts.” This section should give you a good idea of what the plaintiff/petitioner is alleging happened. Remember these are just allegations and they may or may not be true.

Next, you should read the rest of the document and see what type of “remedy” or “relief” the plaintiff is looking for (i.e. do they want money or do they want the court to grant them “equitable relief,” requiring you to do or to stop doing something).

Once you have read the complaint, you should begin the process of gathering documents that might be relevant to your defense. You should make sure to preserve and not throw away or destroy any documents (including electronic communications) which may in any way relate to the lawsuit. You should also organize your documents by putting them in chronological order and by numbering them. Your attorney will appreciate it and you will save money by reducing his time spent sifting through documents.

After you read the complaint and understand, at least in general terms, what the lawsuit is about, you should call your insurance company and let them know about it. You should do this even if you do not think that your insurance will cover this type of claim. It is better to err on the side of caution and report it than to wait and potentially lose coverage for a covered claim because you delayed.

The next thing you should do is start looking for an attorney. Many attorneys specialize in specific areas of the law, and not every attorney can handle every type of litigation claim. You should ask for referrals from any attorneys you know. Use Google search and meet and interview several attorneys to make sure you find the best fit for your situation.

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