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LLC owned residence; do we use Residential or the Commercial All in One
December 4, 2020
LLC owned residence; do we use Residential or the Commercial All in One
            We have a residential property which was just sold and the new owners have all their assets housed under an LLC; we are to identify the subscriber as the LLC and bill the LLC.  Should we be using the Residential or the Commercial All in One?   
            Thank you in advance.
 Best regards,
            Interesting question.  The customer is clearly the LLC; that’s who you list as the subscriber and that’s who you invoice and accept checks from.  That sounds like a commercial transaction calling for the Commercial All in One.
            But you know it’s a residence being occupied by the owners of the LLC.  It’s not a rental property.  Let’s look at this from the end of relationship perspective, rather than the getting started point.
            The subscriber doesn’t pay you; who you going to sue?  Answer is the LLC.  No personal guarantee?  Then you can’t sue the owners or occupants.  
            Subscriber suffers a loss?  Maybe personal injury, maybe property loss as in damage or theft.  Who is likely going to sue you?  Could be the LLC but more likely the insurer of the property and the occupants, unless the personalty in the house is also owned by the LLC.  The occupants in the house who suffer personal injury can sue on their own behalf.  
            Since the contract is your first line of defense you will be looking for it and at it.  If it’s the Commercial All in One only the LLC signed it.  If the LLC isn’t the one suing you then you’ll have to figure out how to use the contract to insulate you from exposure.  
            OK, enough musing.  I recommend using the Residential All in One in this situation.  Why?  First of all, you can’t go wrong using the Residential form even in a commercial transaction, whereas you cannot use a commercial form in a residential transaction.
            Second, I would suggest setting up the contract with the LLC as the subscriber, but requiring the owners to sign as well, agreeing to the terms of the entire contract.  If they won’t agree to be bound to payment obligations then you can exclude that if you want to, but they need to be bound by the other terms.  You may have to specifically mention the arbitration provision to get it enforced.  
            Despite the customer’s request it would be better idea to name the owners as the subscribers and add on the contract that the LLC is to be invoiced.
            I do want to leave you with one important point.  It does matter which contract you use and how you draft it and how you get it executed.  When it comes to the Standard Form Agreements, the Kirschenbaum Contracts ™ you’re getting the gold standard contracts in the industry, but you still need to know how to use them.  No point carrying around a Glock if you can’t figure out how to load and shoot it.

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301