10 Things You Should Know About Landlord Liability and Exposure

November 1, 2010

1. Injury Responsibility

A landlord is held responsible for an injury on the rented premises if it can be shown that the landlord or his agent was somehow negligent in maintaining the property, and that the negligence in doing so was the proximate cause of the injury.

2. Dangerous Conditions

Actual negligence need not, in most cases, be specifically proven. It’s sufficient for the plaintiff tenant to show that the landlord actually knew, or should have known, of a dangerous condition and, either failed to repair it, or to give adequate warning of its presence.

3. Inspect the Premises

To avoid, or at least minimize, the possibility of a lawsuit for negligence, a landlord, or his agent should inspect the premises from time to time, not just at the beginning and the end of the leasehold. Keep lists of complaints and the repairs that were made. Get tenants involved by encouraging them to report dangerous conditions, or security problems.

4. Other Perils

Most policies cover damages and losses from fires, rain, wind and hail storms, burglary, and acts of vandalism. Other perils, however, depending on the region, usually arenÕt covered. Losses from earthquakes and floods are the two most common. The policy should adequately cover the actual value of the building.

5. Liability Claims

Liability claims are usually covered by a comprehensive general liability policy, which includes the payment of damage awards, as well as attorney fees and costs incurred in defending against lawsuits. They are conditioned on the deductible amount and the policy limits.

6. Added Liability Concerns

A landlord should also be aware that lawsuits based on liability claims may arise from other sources than personal injuries. Claims based on the invasion of privacy have burgeoned in the Internet age, along with more traditional complaints. These include charges of libel (i.e., printed or broadcast statements, including e-mails) and slander (i.e., oral defamation of some kind). They also encompass claims for acts of discrimination, which are usually based on race or religious belief, and claims for unlawful or retaliatory evictions.

7. Vehicle Liability

Any and all vehicles used in the landlord’s business, including those of agents and employees, should also be covered by liability insurance. Even though a liability claim involving a traffic accident may have nothing to do with the landlord’s tenants, such an occurrence nonetheless exposes the landlord’s business to a liability claim, which in many cases can result in substantial damage awards.

8. Dogs and Critters

Dogs and other critters may also expose a landlord to liability. This largely explains why landlords frequently prohibit their tenants from keeping pets. The liability cannot be asserted simply for renting property to a dog owner, but, again on the “should have known” principle, if the landlord exercised some control over the dog, or “knew” the animal was potentially dangerous, he could be exposed to liability.

9. Security Issues

Although the common law imposed no duty on a landlord to protect tenants from criminal acts, modern law has evolved to the point that a landlord, under certain circumstances, may be responsible for the tenant’s security. Failure to adequately carry out that duty can expose him to liability. Landlords take on the responsibility for making sure the common areas — hallways, stairways, elevators, etc. — are kept in good condition and are reasonably safe from would be criminals. This frequently requires hiring security personnel and the installation of surveillance equipment.

10. Bad Behavior Tenants

A landlord also assumes some responsibility and potential liability, for the conduct of his tenants. If he knows of unlawful, obnoxious or other behavior that amounts to an ongoing nuisance, the landlord is required to take steps to protect other tenants, and indeed other people, who are affected by his tenant’s unreasonable conduct. This includes evicting the offender, if necessary.

Topics Claims

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Insurance Journal November 1, 2010
November 1, 2010
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Focus on Professional Liability/PLUS; Habitational/Dwellings; Agents E&O Survey