Updated: May 13
By Dawn Pelikan of Kings III
Your legal liability as a property manager and/or building owner may vary from state to state, but, generally speaking, many in the industry face a core of common liabilities. What it usually boils down to in all cases is the contract you have with your tenants. Each lease agreement should be crystal clear regarding each party's expectations and how you or they may be rendered with or without liability in certain situations. If you don't have this spelled out clearly, the court may take a different view of your defense. Of course, none of this is news to you.
Pay special attention to these common causes of property manager and building owner liabilities and act accordingly.
1. Code Compliance
Of course, all property managers are held liable for code compliance and must follow all applicable property laws. This includes everything from fire prevention to plumbing dimensions to construction standards. Code enforcement officers may visit the property (sometimes unannounced) to make sure all rules are being followed. You may be cited for a number of violations, including:
Environmental, fire, or health hazards
Unsafe building conditions
The ultimate goal is to protect tenants from danger and preserve the property values of a community.
Most property managers and building owners are all-too-aware of the many layers of codes they must follow to operate a property legally. There are different codes for different types of commercial buildings, from office to multifamily. In many cases, codes are local and statewide, but there are some federal code regulations as well.
On the federal level:
The Americans With Disabilities Act (ADA) is a federally enforced code that lists the required compliance for building access for disabled persons.
The International Building Code (IBC) protects tenants from flaws in design and installation.
The American Society of Mechanical Engineers (ASME) is very involved in developing codes and standards in the construction and operation of commercial properties. Most elevator codes and standards come from this organization.
Even with national codes, it is often up to your state to determine which code year they will adopt when it goes into effect, and if there is anything unique, they will apply for enforcement. If you've been in the property management game for any time, you know code adoption certainly varies between municipalities, and the same can be said for enforcement from local authorities having jurisdiction. Often, inspectors will interpret code differently, and that can make compliance a moving target. We see this ourselves from time to time in emergency communications code related to elevator phones and pool phones – most often associated with two topics: the use of line seizure technology and the use of cellular. Find out more nuances by state here.
Remember that building codes evolve and change over time, so you will have to do the same. Failing to keep up with code compliance could result in unsafe conditions for tenants, fines, and even lawsuits. For instance, ASME updated a large part of its elevator code in 2019. Learn more here.
2. Criminal activity on the property
Tenants often sue property managers and building owners for the advent of criminal activity on the property or for not taking the proper steps to prevent crime. Particularly in the property manager's case, lawsuits can be brought, and fines can be imposed for public nuisance and drug dealing on the property.
Your best route to avoid possible litigation: carefully screen prospective employees and tenants. Look for criminal backgrounds. A thorough background check may make all the difference.
Remember: The Federal Fair Housing Act considers denying a lease to any tenant with any criminal history discriminatory. Factors to consider when taking on a tenant with a criminal history include the type of offense and the length of time since the violation occurred.
Another consideration: add a crime-free lease addendum to your lease. The court will consider this a civil contract, allowing you to show that the tenant promised to follow all of your property's rules, including zero tolerance for any criminal activity. You can find a sample addendum here.
See tips for crime prevention in our blog post: Crime Prevention for Your Building.
3. Secondhand smoke
The dangers of secondhand smoke are no longer based on opinion, but there is still no nationwide law against it. This doesn't mean that it's not your problem.
Many — but not all — local and state governments have instituted clean indoor air laws, which vary from place to place. Find out more about your state laws from The American Lung Association.
According to The American Cancer Society, secondhand smoke contains at least 70 cancer-causing chemicals that affect adults, children, and pets. There is no safe level of exposure to secondhand smoke. Even a small amount can be harmful.
Your best solution as a property manager or building owner: prohibit all smoking in indoor and public/common spaces. It's not enough to simply separate smokers from nonsmokers or provides designated smoking areas. Even properly ventilating buildings will not protect smokers from secondhand smoke.
It's a sad fact that thousands of children are injured or killed due to a fall from windows and balconies. Many people falsely believe that a screen is an adequate protection from a window fall, but screens are often flimsy and not resistant to pressure. It's not uncommon for property managers and building owners to be held liable for these terrible accidents.
Here are some solutions:
Conduct consistent safety surveys of your property.
Install window stops so that children cannot easily open windows.
Check how your balconies comply with your local building codes. Ask your safety experts what it would take to make your balconies safer for children.
Ask your tenants to agree to use baby gates.
Immediately replace damaged or non-functional windows and screens.
Drilling down further, The National Safety Council has issued tips to share with your tenants when working to avoid window falls, as reported by The American Apartment Owners Association. Be sure to pass these on to your tenants:
Keep furniture, or anything children can climb on, away from windows.
Keep windows closed and locked when children are home.
Keep children's play toys away from windows and patio doors.
Share with tenants that an open window with an insect screen is not a safeguard from a fall.
Do not paint or nail windows shut because they may be needed for emergencies.
Always keep in mind that unguarded windows pose a danger to children under 10.
5. Slips and falls
These are generally considered personal injury cases, which means that there must be proven negligence. That could mean that a property owner or building owner was negligent in protecting tenants and visitors from slips and falls. However, negligence is often hard to prove.
There are four elements required to establish a negligence case, according to the Cornell School of Law:
The existence of a legal duty that the defendant owed to the plaintiff
Defendant's breach of that duty
Plaintiff's sufferance of an injury
Proof that the defendant's breach caused the damage (typically defined through proximate cause)
Slips and falls can come from:
Sidewalk, driveway, or parking lot cracks
Wet or greasy floors
Snow or ice
Faulty or poorly lit stairs
Your best solution:
Be on a constant lookout for these defects, and have them repaired, upgraded, or replaced immediately.
Place warning and caution signs in the area, and block off the area if possible.
Provide staff training for slip and fall situations, including how they should record and report any injuries.
Make sure you have a solid liability insurance policy.
6. No emergency communication system records
Do you have a record of all the emergency calls placed from your property? This can include any of the following: elevator entrapments, health emergencies, emergencies at poolside (whether pool-related or otherwise), crimes or issues in the parking garage, etc. If the incident goes to litigation, you'll need to access the emergency call records that can tell the story of the situation. The record will allow you to provide proof of what happened from the emergency call