If you own property, you have landlord liability. Remember, owning property is more than just having a second job. It’s a huge responsibility, too. Like you, I’m a huge fan of people taking responsibility for their own actions. That goes for you as an owner as well as for the people who rent from you.
Having said that, you need to know what you are responsible for as a property owner. As far as the law goes, you (as a landlord) are considered to be inviting people on to your property as long as they aren’t trespassing. Much of that is spelled out in your lease. (If you want to start using a lease that is prepared professionally and do so inexpensively, check out my LegalZoom review.) That being the case, you have liability. Keep in mind that laws vary from state to state. Also, it’s important to spell out who is responsible for what in your lease agreements
Generally speaking, what are landlords responsible for?
If you own property, you have a duty to maintain the common areas, warn tenants of unseen dangers and provide a safe place to live for tenants. You are responsible if and only if your negligence caused the damage. That means if you have done everything possible to protect your building, but a flood ruins your tenants’ home, the landlord isn’t responsible. Here are the elements of negligence:
a. The property owner had a duty to correct the dangerous situation and failed to do so in a reasonable time.
b. The solution to the problem wasn’t unreasonably expensive.
c. Because the landlord failed to fix the problem, injury resulted.
d. The damage was foreseeable and significant.
e. The property owners’ negligence caused the damage.
In order to be held responsible, all five conditions must be present.
What can a tenant collect from a negligent tenant?
- Medical costs
- Lost wages
- Pain and suffering—including emotional distress
- Damages to property
Are landlords liable for injuries to tenants and visitors that occur inside of a rental unit?
Keep in mind that landlords aren’t responsible for what goes on inside the unit – only what happens in the common areas. The only exception is if the property owner did a poor repair job on something and the result was injury.
What can a landlord do to minimize liability exposure?
There are two course of action. The first is to keep the property in top shape. Don’t defer maintenance. And take care of problems immediately. Don’t allow a small problem to become a large catastrophe.
The second way to protect yourself is to purchase liability insurance. It’s very similar to liability insurance for small business – because when you own property, you own a small business. Comprehensive general liability insurance policies are the best tool property owners have to protect themselves against lawsuits brought by tenants.
These policies cover such hazards as fire, flood, earthquake and burglary. You can expand your coverage to cover your tenants too. These policies also cover property owners when their tenants suffer damages as a result of defective conditions on the property and legal assistance to defend them as well.
If you are interested in a policy like this, make sure to ask about coverage against injury, invasion of privacy, slander and evictions. Basically, make sure you work with an insurance agent and company that specialize in rental properties.
If you’re a landlord, you want passive income, but you don’t want to get into hot water. What kind of liability issues have you encountered? Did you have enough insurance? Did you have the right kind of insurance?