Premises Security Liability
Landlords and property managers have become the target of what appears to be a legal trend called premises security liability. Premises liability is a civil action where a plaintiff will attempt to hold a landlord or property manager liable for money damages for injuries inflicted during a violent criminal attack committed on their rental property. The damages sought can be for both physical and psychological injuries suffered following an attack. The allegation is usually that the landlord contributed to the plaintiff’s injury because of a failure to provide adequate security on the property. In recent years, insurance industry statistics have shown that the highest premises liability jury awards have been for sexual assaults and deaths on apartment properties.
The word of multi-million dollar jury verdicts against landlords has been spread by the media and in legal trade journals. This negative coverage has created a rush of new lawsuits around the country against landlords and property managers. The litigation rush has become so widespread that both plaintiff and defense bars now hold regular seminars for this area of law practice. The Association of Trial Lawyers of America meets annually to offer training programs on how to successfully sue an apartment landlord for premises liability.
To prevail on an inadequate security claim, the plaintiff must prove that the landlord breached their duty of care by failing to provide reasonable security measures, under the circumstances. Typically this is done, for example, by demonstrating that door or window locks were defective and not repaired or lights were not functioning for weeks prior to plaintiff’s assault. The focus could also involve an employee of the landlord. The negligence allegation may focus on the methods used for hiring, training, and supervising the apartment manager, the leasing consultants, the maintenance personnel, or the security officers.
Until you have been sued for over a million dollars in a protracted litigation, you may wonder what all the concern is about. More than one, litigation-free, landlord has told me, that’s why I have insurance when describing their indifference to being sued. They just don’t believe that taking proactive steps will make any difference in their tolerance to be sued or ability to defend should they be sued. They just don’t understand the problem.
One big problem, not often considered, is the possibility of being sued for punitive damages. Punitive damage awards are designed to punish a landlord or property manager, not merely compensate the plaintiff for their injuries. Punitive damages are awarded when the jury believes a landlord or property manager acted with malice or with a conscious disregard for the safety of the plaintiff, prior to being injured. An extreme example might be when a landlord knowingly hired a maintenance man, just paroled from prison for child molestation, and provided him with a uniform, free apartment, and access to a property filled with children. Punitive damages are not usually covered by liability insurance and therefore are expected to be paid out of the personal assets of the person being sued.
Business Records Exposed
A frustrating litigation problem arises when your property is viewed under a judicial microscope, in a very public forum such as a trial. A landlord or property manager must answer detailed questions about their private financial statements, business holdings, and methods of operation. Even your most confidential business records and damaging in-house reports must be produced, if so ordered by the court. I know landlords who have spent hundreds of hours researching records in preparation for trial. I’ve seen management offices literally turned upside down looking for documents and attempting to organize five-years of files that had never been organized before. Worst of all, after the trial is over, these records may be passed on to other plaintiff lawyer during the course of a subsequent lawsuit.
Manager Under Fire
In high exposure litigation, it in not unusual for management employees and staff to become involved as percipient witnesses. I’ve also heard many resident managers say that they felt like a gun was to their head during their testimony. They feared repercussion, if they didn’t respond correctly or in a manner consistent with others. Careers have been ended or altered because of the outcome of an intense litigation. The process has a way of bringing out the worst flaws in property management because of the focus on the negative issues and imperfect decision making. These newly discovered flaws have been the basis for job demotions and terminations. Sometimes, when the focus is on the qualifications or credibility of a resident manager, the plaintiff hires a private investigator to examine the background of that employee. Too often, these investigations have turned up fraudulent backgrounds, criminal convictions, and even current arrest warrants.
Obviously, the best way to avoid the whole process is to operate your property as if you could be sued at any moment. My 10-Step Apartment Security Plan addresses this issue and is designed to make any multifamily housing property better prepared for that moment.