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.
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:
- Become pseudo-experts ourselves – this is what we did learning the ins and outs of the local real estate market a few years back
- 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?
- 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.
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!
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)
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?