Landlord's Exposure is Indecent
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Members' Homepage Much of the information on this page came from a study by Liability Consultants, Inc titled, "Major Developments in Premises Security Liability II (1999)" by Norman D. Bates, J.D., Liability Consultants, Inc., 39 Union Avenue, Sudbury, MA 01776. Their phone number is 978-440-9906 and information about their services can be found on their web site at www.liabilityconsultants.com. Rental property owners are about the most exposed business in the world to lawsuits often based on the whims, scams, criminality and stupidity of tenants and their guests. The settlements paid by insurance companies on behalf of landlords for crimes like rape and assault in the U.S. is more than $500,000. The average jury award for cases that actually go to trial is $1.2 million. See the graph below A 1998 study by a security consulting firm showed that apartment complexes are about the most often sued business there is. Even insurance nightmares like: bars, shopping malls and hospitals have fewer claims of liability and negligence than apartment community owners and managers. The primary reasons people sue are for criminal acts against them or accidents that occur on the property. People expect to feel safe and secure in their own home. When we leave our "shelter" for the shopping mall, movies, sports event or other public places, we are more alert to possible threats to our safety. We instinctively watch for the unknown and possible dangerous situations; whether broken sidewalks, unsafe stairs, or suspicious strangers. Home is a place to let down our guard and relax.
A recent study of judgments and awards indicates that judges and juries share the notion that people are entitled to be safe in their home. When they are not, someone is likely to be made to pay. You will learn on this page that property managers rank among those most likely to be sued and that apartment communities lead the list. Property owners and managers need to help tenants understand, however, that an apartment community is just that; a microcosm of the community it is located in. The same care must be taken in interaction with neighbors as they would do elsewhere.
The most common criminal acts that lead to lawsuits against landlords in apartment communities are assault and battery. They represent about 41 % of the cases. Those cases are followed in descending order by rape or sexual assault, wrongful death, and robbery. Most criminal acts on rental property occur in unlocked common areas like parking lots or garages. As a result, a claim of negligence against the property owner or manager is almost always related to inadequate lightning or security.
Slip and fall accidents in the common areas and other maintenance-related accidents lead the list of issues that are not security related. The primary reason that contingency lawyers pursue law-suits against property owners is that there is something to get. The usual issues in premises liability cases are:
Inadequate lighting is about the simplest liability problem to prevent. Dark areas are most often caused by the most basic reason, burned-out bulbs. Good management would suggest a nightly schedule to check that all bulbs are lit and have any bad ones replaced immediately. It is also worth noting that the axiom that says property owners and managers can't always see the forest for the trees is true.
It is a good idea to occasionally take someone unfamiliar with your property with you on a walk around. You need to try to see the building and grounds with the eyes of a burglar, attacker, or even a peeping-tom. You know every nook and cranny and may not notice shadowy areas in stairways, walkways and parking areas where someone could loiter or hide-in-wait. What you see as mature landscaping someone else may see as high bushes and low tree limbs that make good hiding places. When you locate dark or hidden areas, light them up and trim that foliage.
If you notice loitering in some of your parking or common areas by tenants or locals, use motion detector fixtures to brightly light up their favorite spots. They will soon find another "more comfortable" location to hangout. Property owners and managers have been found negligent when darkness helped a criminal surprise a victim. Failure to warn of danger. If you have knowledge of potential danger to your tenants, it is always best to inform them so they can take precautions themselves to help prevent injury. Reports of burglaries and assaults on your property, or even in the neighborhood, should not be ignored or kept quiet. You may not want to to panic tenants or scare applicants away. However, your reluctance to risk losing a tenant could cost both your conscience and your financial well being dearly. Failure to warn tenants and applicants of dangerous situations can get you sued for negligence if harm comes to them because you were aware of a potential danger and did not pass the information on to them.
False sense of security: Don't make any claim or statement that could give an impression that your property offers special protection to people and their possessions, unless you are sure that it does. Whenever a tenant or applicant addresses safety issues, make it clear that extra security is not an amenity you offer. You cannot normally be expected to protect your tenants from every third-party risk, unless you make such claims.
If your property contains "controlled-access" or " security gates", you might consider calling them "gated" or "limited access" entry instead. Some property managers now refer to " security guards" as "hospitality staff" or "public relations" officers to help prevent tenants from a false sense of security Even locks on windows and deadbolts on doors might be described as "meeting legal requirements" and of "good quality." It is probably best to never ever claim that they prevent break-ins. How safe is the neighborhood? In America today everyone must always be alert to bad guys or situations, even in the so-called "best neighborhoods. If you discuss the property's location with a tenant, point out that there are problems in every neighborhood and that troubled areas in a community tend to move around. However, if your property is located in a current problem area, you had better be honest and inform the applicant about any recent crimes in the area you know about. Advise them, if they are really concerned, to check with the police department and note on the application that you did so. The police will probably reinforce the fact that when law enforcement targets "bad neighborhoods" the bad guys tend to move on to another neighborhood. Talk Tenant Insurance during the application. Tenant insurance should be addressed with every applicant before a lease is signed. Every property owner or manager will eventually face the tenant who wants to hold them responsible for damage or theft of their personal possessions on the rental property. Tenants must understand where a landlord's responsibility ends and their tenant insurance policy begins. A landlord's coverage does not extend to their liability, or to replacing a tenant's personal property for a loss occurring from risks like fire, vandalism and theft.
Tenant's insurance, like homeowner's, is a package of several types designed to cover more than one risk. The cost of each insurance company's package will vary and the coverage may be slightly different, but the renter's policy is relatively inexpensive because both policy limits and risk will be much less than for a homeowner. The coverage on a building accounts for a major portion of the owners premium. Tenants only need to insure against losses to their own property, with limits likely to be from $20,000 to $50,000.
The fact that a tenant may not choose to buy insurance does not make a landlord libel for a loss. See our page: Tenant insurance may cost very little.
Over a recent 5-year period, 1993 to 1997, nearly 800 cases were analyzed regarding the kind of business most likely to be sued. The results of that study are depicted in the following chart.
It is clear that apartment complexes, more than most other types businesses, are likely targets for lawsuits. You should note that property managers and even security companies also made the top ten.
Although more than 50% of the cases that went to trial were decided in favor of the landlord, these "winning" landlords lost the substantial cost of defending themselves. We need also note that many landlord liability cases don't ever get to trial because insurance companies decide that a settlement will be less expensive than defending even unwarranted allegations.
No matter how conscientious and knowledgeable property owners and managers are, lawsuits will always be part of the cost of doing business in the U.S. The best defense is the ability to demonstrate by records and actions that every reasonable effort was made to keep rental properties safe and well maintained. The only other means we have to combat the problem is through political activism. Please read the RHOL Political Page.
Now also read our page on Limiting Landlord Liability.
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