He Said She Said: A Team of Professionals

Since the He Said/She Said posts seem to be getting pretty good responses, we’re going to be trying to make these PoP discussions an ongoing feature here on the site.  For a look at some of the past He Said/She Said discussions – check ’em out here.  

 

The Background On Today’s Conversation

Mr. PoP and I are pretty smart, but we’re not experts at much other than our own jobs.  So when there’s something that we don’t know, we usually end up with three choices:

  1. Become pseudo-experts ourselves – this is what we did learning the ins and outs of the local real estate market a few years back
  2. Study inexpensive sources and apply it to one specific situation – how do you think Mr. PoP would have learned to lay tile if not for youtube and websites?
  3. Hire experts to provide knowledge, guidance, and services – this is what we’re talking about today

But hiring experts can get pretty pricey, especially now that Mr. PoP is more than murmuring about wanting to hire a Real Estate Lawyer to write up a formal contractual agreement with the neighbors of our empty lot.  Right now, we’ve got a handshake agreement whereby they mow the lawn in exchange for getting to use our lot to park their boat, and to use the seawall and dock on our property to board boats when they’re in the water.

We’re totally good with the agreement, but the open question is one of liability.  We don’t currently carry an sort of umbrella insurance policy, or any specific liability policy that addresses ONLY the undeveloped lot.  Our insurance agent advised us that the only portion of that lot which is not covered by our homeowner’s policy on our primary residence is the 12 sqft dock.  If some idiot trespasses on the lot, and trips, falls, and breaks their leg, we are 99.8% covered, since 0.2% of the lot is the dock.

So Mr. PoP wants to pay a lawyer to draw up a contract that formalizes the mowing agreement, and waives PoP liability if they are ever injured on the dock.  And that’s where we’re picking up today’s conversation.

 

He Said

To start with, the liability issue is some scary stuff, and we’re not broke young kids with no assets anymore. It’s taken us a few years, but now that we’ve accumulated some small bit of wealth I want to make sure its protected. I suppose we could draw a contract up ourselves, but the risk vs. reward just doesn’t seem worth it.

As I get older I’m more willing to pay for the best advice available on topics that I think can make a difference in our wealth and happiness. If you’re choosing a lawyer to protect you from a million dollar liability suit, and Lawyer A is $100 and Lawyer B is $200 an hour the difference in hourly cost is almost nothing in comparison to the loss you might suffer for sub-par advice.

I also want to start traveling in the sorts of social circles that entrepreneurs, RE  developers and other high-net worth people frequent (notice I said high net worth, not high consumption).  My the peer group at work is great, but they’re really just a bunch of sales dogs who don’t really get what Mrs. Pop and I are trying to do. I need somebody who I can talk to who (outside of the interwebs) is currently building some wealth of their own, and may be able to share investment opportunities and ideas. Right now, one of the ways that I can start to figure out who in this town is like us is to contact the professionals (lawyers, business brokers, tax accountants) that they might use and ask for an introduction.

Lastly, when I say “Or else I’ll call my lawyer!” to somebody, I want to actually have a lawyer to call!

 

She Said

Okay, so money is pretty obviously an objection here.  Let’s face it, I’m cheap, and lawyers are expensive.  The number we’ve been throwing around for an estimate of what this might cost is $500.  From a money perspective, I’m just not seeing the benefits.  First off, this is a piece of land that we’re probably going to hold another 3-5 years.  Not indefinitely.  So that $500 doesn’t get amortized over the next 30 years.

Instead, I like to think about what that $500 could get us that would address the liability issue as well.  For instance, $500 could buy:

  • 2 Years of a Licensed & Bonded Mowing Service
  • 2.5 years of an umbrella policy if we qualify for some of the rates I’ve seen online (~$200/yr for $1mm policy)
When we’re looking at selling in 3-5 years… I just start to think that $500 could be better spent than on a little piece of paper.

But my biggest reason for not wanting to slap a formal legal document down in front of this guy who’s been happily mowing our lot the last year is because THE DUDE IS HAPPY.  I can see this neighbor interpreting our shoving a contract under his nose as a pretty big affront.

Because of that, I’m not 100% convinced he wouldn’t be so offended that he would refuse to sign it.  And then where does that leave us?  With a piece of paper we spent $500 on and Mr. PoP driving the mower up there regularly.  Not to mention, why do we want to piss off the neighbors when they’re going to be the first ones potential buyers talk to when we’re getting ready to sell this lot?

 

So that’s where we stand, folks.  Unlike many of the other He Said/She Said posts that we’ve put forth so far, this one is still totally up for discussion, so your opinions and perspectives are especially wanted today.

What would you guys do in this scenario?  If you were the neighbor, would you be offended if we asked you to sign a contract after mowing the lawn happily without one for the last year?

54 comments to He Said She Said: A Team of Professionals

  • I wouldn’t spend the $500 on it personally…but that’s just me. If anything, like you said, I would just hire a licensed and bonded mowing service.
    Holly@ClubThrifty recently posted..Juicing Vegetables: My Unfrugal ObsessionMy Profile

  • Hiring a mowing service wouldn’t cover trespassers injuring themselves. I would buy an extension to my current policy to cover everything, not just the boat owners.
    Pauline recently posted..13 money resolutions for 2013: #12 make a plan!My Profile

    • That’s what I’m leaning towards, and hopefully I can get Mr. PoP on board with that as a better option. I just need to work with our insurance agent to find out more since I remember briefly looking at it ages ago, and a policy JUST for the lot was incredibly expensive!

  • I agree With mrs. PoP. If you are losing sleep, buy an umbrella policy. The agreement wont cover everyone visiting your lot, just the neighbors so doesn’t totally solve your liability problem. Sounds like the money could be better spent to protect your assets and your neighborly relations – and maybe brainstorm ways for Mr. pop to connect with movers and shakers in the area.

    • Do you have any ideas for starting that brainstorm session? Around here there are so many people who have already “made it” that sometimes it seems tough to find people in the thick of the process the way we are.

  • I wouldn’t jeopardize such a great relationship with the neighbors–those are like gold! I would up the policy for full coverage and work on the networking :)
    The Happy Homeowner recently posted..Personal Finance and Lance Armstrong: What You Can Learn from Lance’s Fall from GraceMy Profile

    • Ugh… Networking feels like such a dirty word sometimes, right? More like a chore. What we really want are friends who are in the process of building their wealth, not mostly done with it =)

  • It’s a tough call for me, but I think I’d go with Mrs. Pop on this one…assuming you’ll be selling in a few years. I’d beef up the insurance and start on the networking. The neighbor is a hard call…he could totally understand and be fine or it could sour the relationship.
    John S @ Frugal Rules recently posted..Taking the Plunge: Budgeting and the EntrepreneurMy Profile

    • Selling in a few years is the variable we don’t have control over. The game plan when we bought the lot about a year ago was to hold it for 5-7 years, anticipating a rebound in RE. And we’re seeing big rebounds in nearby areas, but not quite yet in undeveloped lots. (But those would be the last to rise…) So there’s hope that we’re at least on schedule if not a little ahead of schedule – but it’s a schedule we have no control over.

  • I’d go with Mrs. Pop on this one (wow I finally agree with her on something! 😛 ) When you start creating contracts with friends…it’s almost like you’re missing the point, you know? And I think they would be offended, because I know I would be. Don’t burn bridges over .02% protection. Just up your current policy. And I also agree with the above comment that you should network in other ways, check out your local chamber of commerce. I know mine has a young professionals group that’s fun to attend.

    • Haha, I’m not a crazy horrible cheap person I swear! I’m really not hard to get along with! =)

      Mr. PoP tried the local Chamber of Commerce years ago before we were married, but that was in the depths of the recession, so it wasn’t really a happy bunch at the time. Maybe we should reconsider and give it another go?

  • Hmm. Honestly, liability comes into things so much less in Canada. It still does, but not to the extent it does in the states.
    I love being able to say “my lawyer” because a good friend is a lawyer :-) My friend says “my arborist” and goes “ya, I have an arborist.” Hehehe.
    I’d grab the umbrella insurance, myself. Can you have a quick chat with the neighbour about liability and check that they have coverage somehow?
    My friends once got an absolutely fantastic deal – a guy with a bobcat who used the lot next door asked to use an exterior outlet of theirs for the winter, in exchange for plowing their driveway for free! They definitely got a great deal for that, plus the other guy didn’t have to pay to install a power line and outlet on the lot, with metering and everything.
    Anne @ Unique Gifter recently posted..Malibu Mail – Random Acts of KindnessMy Profile

    • Haha, we have friends that are lawyers, but none of them are licensed in FL, so it kindof defeats the purpose.

      PS – the first time I read your comment, I totally thought you meant a guy that owned a bobcat (the wild animal) as a pet, which I was VERY impressed with. But the arrangement for free plowing seems pretty great – actually very similar to what we’ve got set up with the neighbor of this lot right now.

  • When it comes to legal documents, I would opt to hire a lawyer instead of just winging it. However, it seems that you have a good arrangement with your neighbor and everyone is happy, so if the contract isn’t really that necessary, I guess you could hold off on that for a little while.
    Felix Lee recently posted..How to Make Money with Domain ParkingMy Profile

    • Yeah, sometimes I like to think that I’ve read enough contracts and TOS that I’d be able to write something coherent enough – but would it really stand up in court if it came to that?
      I guess for now, I’m guessing that it’s less likely to come to that if we maintain friendly relationships with the neighbors and don’t get contracts involved. But I could be totally wrong…

  • I’m not sure that the neighbor being happy now really matters. How happy is he going to be when something goes wrong? I’d protect yourself.

    That said, even as a former professional, I’m not big on hiring them EXCEPT where it’ll add money to your pocket or address a concern that you can’t answer yourself in a reasonable amount of time. I think a LegalZoom contract might work as well as a good attorney in this case, so I’d go less expensive. However, if you’re like some of my clients, who could have managed their own money but MADE MORE MONEY by being awesome elsewhere and finding the world’s best financial planner to help out (I’m a little biased), then it makes sense. Fun debate.
    AverageJoe recently posted..College Planning Strategy: A Creative (and Effective) OptionMy Profile

    • Are legalzoom contracts usually good? We considered using one for our rental, but it didn’t seem to contain enough of the prescriptions specific to our area, so we ended up modifying a friend’s contract that a lawyer had drawn up and using that.

      I think we’re going to end up protecting ourselves… I’m just not 100% sure how it’s going to happen yet.

  • I think as a neighbor, I would be offended if you came over with a document like that. Beefing up the policy makes it so that you might still have to pay something if someone were to get injured on your property, but they wouldn’t be able to take you for all you’ve got!

    What happened to being able to trust our neighbors? Too much suing going on! Hopefully, if your neighbors did ever hurt themselves on your property, they wouldn’t try to sue you. I know that I would never do that to a neighbor! I wouldn’t even do it to a McDonalds…and I hate McDonalds. 😉
    Michelle recently posted..See Debt Run – 1 Year BirthdayMy Profile

  • I’d get the umbrella. I bet if you went to a lawyer, it would end up being more than $500. I think anyone with assets should have an umbrella anyway. You never know who might sue you,most likely someone from a fender bender. Most auto policies don’t have a high enough limit.
    Kim@Eyesonthedollar recently posted..Benefits of a Crappy JobMy Profile

    • I hadn’t thought about auto policies either. I think we’ve got $300K? liability on the auto… whatever is standard in FL, but it’s getting to the point if you’ve somehow caused an accident involving a few cars, if a couple of them are expensive, that limit could be hit.

  • Ivy

    I for one would be offended. But then we come from Europe and the thought of suing somebody when you trip and fall rarely passes through one’s mind.
    Very recently I was walking with my 2-year old on the street next to ours and he ran across one of the front lawns. There was nothing outside for him to damage so I watched him but didn’t make a big effort to catch him. Then this old guy came out of the house and started shouting at me to remove my kid. My first thought was that there is indeed something there that my son could break, so I ran over to grab him, and then the guy continued “he will fall and hurt himself and then you will sue me!” I was flabbergasted, my jaw literally dropped open. That’s when it hit me that people here really think that way. Before, even though I’ve lived here for over 10 years, it felt like a joke.
    On the off chance that your neighbor thinks like me, I wouldn’t risk going all legal on him. But on the off chance that he is the type that would sue if something happens, I would consider the umbrella insurance (or can’t your home insurance cover it – maybe as a second property?).

    • The homeowner’s policy on our primary residence covers everything EXCEPT the dock, since technically it’s a “structure”. Which is why I tend to think of the property as 99.8% covered. It’s just that last 0.2% which we’ve got to figure out the marginal costs/benefits on.

  • Karen

    I don’t think a release is required. I’m sure a call to your insurance company will tell you what your policy covers (and what would be considered negligence on your part). I don’t think you are responsible for trespassers unless there is a known danger on your lot (which maybe the dock is, since someone could totally ignore the potential to walk off solid land :-/)

    Lastly, when I say “Or else I’ll call my lawyer!” to somebody, I want to actually have a lawyer to call! Doesn’t this mean having a lawyer on retainer? I think that would exceed $500. I called the bar once to find a lawyer to potentially settle a problem with my apartment. I called the lawyer explained my situation, he gave me advice and that was it. I think it was $50 (that I paid when I called the bar to get a referral). Turns out my insurance gave me wrong information Or you know, 1XXXNeedHelp

    The chamber of commerce, Jaycees, junior League and other professional groups would be cheaper than $500 :)

    • As for walking off solid land, you’d have to be pretty drunk or stupid to not realize that you’ve stepped off grass down onto a concrete step 8 inches lower than where you were before. Then you have to keep walking another 4 feet and you’ll end up in a canal. But maybe if we chained the dock off – gave the neighbor the key, and put up a couple of “no trespassing” signs, that might buy us enough leeway on it.

      Mr. PoP’s family always had a “the lawyer”. Not sure if he’s on retainer, or if he’s just dealt with every legal matter in that family for the last 35 years. I think that’s the kind of relationship Mr. PoP would love to have – and we just don’t have that down here.

      Also, in my limited knowledge, $ for JL can EASILY end up over $500 =) Not sure about Chamber, etc. But maybe we’ll start looking into Chamber and Rotary soon.

  • I agree with Pauline and Mrs. PoP. The insurance would cover trespassers and the neighbor.
    As for being offended, it all depends on how you approach him. Depending on their personality it could go either way.
    Justin@TheFrugalPath recently posted..Improve Your Financial Situation One Step at a TimeMy Profile

  • Karen

    See….that 8″ drop from grass to concrete is the danger! =) I kid. Mostly.

    You’re right. I attempted JL in another state and quit because it was going to cost me over $600 the first year. Forgot about that! Look into meetup to find some groups.

  • SLCCOM

    You know, you can save a bunch of money by drawing up the contract yourself, or using Legalzoom, and running that by the attorney.

  • I’d go for the umbrella too. You can get it, and no one has to be the wiser, but your tail is covered for everyone that steps on the property. Worth the money for the peace of mind, I’d say. As far as the neighbor, you’d need to be careful in your wording, but with the umbrella policy you won’t even need to say anything, would you? Bottom line, though, is that his loyalty is going to be to himself first, and yours should be the same. People often become not-so-nice when faced with a life-changing injury, and who can blame them?
    Laurie recently posted..Motivation: Learning From OthersMy Profile

    • I hate to think of it that way, when I tend to think if it were my own darned fault that I was injured, I should suck it up and deal with it. Sadly, I think the umbrella is going to take some serious time to figure out. *Sigh* I guess we’ll probably have a post on what happens, at least!

  • […] He Said She Said: A Team of Professionals @ Planting Our Pennies […]

  • trudy

    I’d buy an extension to your current policy. I have liability that sits on top of my homeowner’s insurance and covers my house, two cars, and a vacant lot. It’s about $400 a year for all of those for $5 million coverage, so how much could it cost to extend the current policy to the 12 sq ft… Plus it removes all the hassle of trespasser, annoying the neighbor, etc.

    • I’m not sure where you are, Trudy, but insurance in FL can get pretty darned complicated, especially as our policies were written by the “insurer of last resort”, Citizens. They’re not into extending coverage… instead, they take it away. Check out this story when we lost the ability to insure part of our house… and they still raised the price! http://www.plantingourpennies.com/2012/08/01/how-we-decided-to-self-insure/

      • trudy

        If I were dealing with the numbers in your other post, I’d self insure as well.

        I’m in New England near the water. Homeowners is very hard to get, but, cross fingers, my independent agent manages to do so so far. AMICA does the liability. AMICA is a great company, but they don’t write any more near the water homeowner’s. They are worth calling to ask about liability.

        • I’ll add them to the list of companies to ask about, but unfortunately the insurance market in FL has had far too much meddling from the state legislature and is a bit dysfunctional at times. Many companies that are common in other areas of the country have pulled out of FL since the legislature intervenes A LOT.

  • I just let out a huge laugh at your bobcat comment above. LOL! I would have be impressed if someone owned a bobcat (the animal) too! But anyway, Mrs. PoP, I would extend the insurance policy. We just had an awkward situation where we loaned our car to a friend. The hubs wanted them to sign a piece of paper saying they’d pay the deductible if they got into a wreck. I said this person was our good friend, and they wouldn’t leave us hanging, so we went with a verbal agreement and left it at that. Everything went fine. Don’t fix what’s not broken, right? You have a good relationship with the neighbors, so keep it that way. As far as networking, omg, is it not so hard to make friends as adults? You should have a little open house block party. Don’t assume that professionals only live in fancy neighborhoods, etc. (I know we will live in apartments for at least 10 years after the hubs earns his M.D.) You can also check out your local meet up groups. These apparently work pretty well. There is a young professionals club in Baton Rouge and they do runs together, have a night at a particular museum, etc. Like I said, it’s really hard to make friends as adults, especially for an introvert like me, but it’s worth it to push yourself a little to find people more like you who can offer good advice.
    Cat Alford (@BudgetBlonde) recently posted..The Truth About Side HustlingMy Profile

    • =D What can I say – I loved the bobcats at our local zoo growing up. They are beautiful!

      “Don’t fix what’s not broken” – I think you put it into better words than I did.

  • I agree with Mrs. PoP – it sounds like a waste of money! It sounds like you and your neighbour have a gentleman’s agreement (not written down anywhere, but honoured by both parties). Why not keep it like that?

    Can trespassers really sue someone if they’re being illegal in the first place?? Surely if someone walked into your house and stabbed themself with your kitchen knives they couldn’t sue you!

    • I’m definitely not a lawyer (if I were, the post would have been moot!) but it’s my understanding that trespassers can sue – at least to an extent. It’s awful and overly litigious, but I think if they can prove negligence of the property owner they have a case. Say, if we had a 6′ chainlink fence around the property it’d be tough to say that the trespasser didn’t knowingly put themselves at risk…

      Hey, maybe that’s an idea. Would a big chainlink fence deter anyone from buying a piece of property?

      • (Not a lawyer)

        Generally speaking, you’d be keeping up the property (you’re obviously not leaving it to get overgrown and turn into a dumping ground) so I don’t think negligence could be proven and having a No Trespassing / Private Property sign with a fence pretty much tells you that it’s not open to the public.

        Law isn’t always common sense but it does apply *some*; I would imagine taking steps like this would mitigate your risk.

        And personally, if I wanted to buy a lot, a fence wouldn’t bother me. If I intended to DO something with the lot then the fence is useful until it’s done; if I don’t, I can just take it down or negotiate that bit of cost with you.
        Revanche recently posted..Irony, in follow-up and business breakdownsMy Profile

  • I’m with the Mrs. on this one too. Buy the umbrella policy or get and extension to the current policy. Avoid pissing off/offending the neighbor and paying for an expensive contract you may not even need in a few years. Finding a good attorney might also be a good idea for other types of advice/future needs, but I’d save the money this time on the contract. Let us know what you decide.
    KK @ Student Debt Survivor recently posted..Personal Finance is Personal-Butt OutMy Profile

    • I think this is going to be one that we’re going to take some time to digest, get some real quotes from the insurance agent, etc before deciding what to do. But we’ll definitely do a follow-up on what ended up being the best option!

  • Sure, a handshake is fine, until it’s not.
    Get it in writing.
    101 Centavos recently posted..Stupid Labeling TricksMy Profile

  • {gasp!} Remember the old saw: “Never do business with friends.” Old saws get that way for a reason.

    Seriously, I’d get an umbrella policy and stop worrying about it.
    Funny about Money recently posted..Grocery-store Gasoline Discounts: Deal or No Deal?My Profile

  • […] Men included our He Said/She Said: A Team of Professionals in the Weekly Round Up over […]

  • […] readers probably remember that we bought an empty residential lot in 2011.  As a quick recap, it’s on a saltwater canal in a growing area.  Our goal is to flip […]

  • […] We didn’t start out thinking we would want or need a lawyer (you may remember that Mrs. PoP is kindof anti-lawyer), but in the end decided that we were much better off for having used auto accident injury […]

  • “I also want to start traveling in the sorts of social circles that entrepreneurs, RE developers and other high-net worth people frequent (notice I said high net worth, not high consumption).”

    I very much like this mentality and wish to do the same. It is difficult to find these types of people, for me at least. They are few and far between.

    We have cash that we’d like to put behind more real estate or perhaps a solid business. I find that most people are extremely fearful of departing from the norm. Some of our friends think we’re nuts for considering rental properties, but I find that a fairly conservative investment.
    Mr. 1500 recently posted..Ask the Readers: When do you Talk about Money in a Relationship?My Profile

  • […] ended up using a personal injury lawyer to help settle the claim, despite our apprehensions about consulting a lawyer for real estate matters, and feel like we came out ahead for doing […]

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