Everybody wants a safe and secure place to live. Part of your job as a landlord is to provide that, but only up to a point.
As much as you might want to go whole hog and do whatever you can to make your property as safe and crime-free as possible, doing it can backfire on you in the form of a liability lawsuit.
Suppose, for example, that you own an apartment building that sits at the bottom of a hill and a street T’s into it. Fearing that your building could be damaged by a runaway car, you build four steel and concrete posts in the sidewalk in front of your building. The engineer that designed them assured you that they would stop a car. It turns out he was wrong.
The young man who rented the apartment directly behind the posts is injured when a runaway car goes right through your four “car-proof” posts and crashes into his apartment. You are horrified. You try to get in touch with the engineer who told you they were safe, but he’s gone out of business and moved out of state.
The next phone call you get is from your tenant’s attorney. He is suing you for negligence and for giving the tenant a false sense of security that the apartment was safe. Chances are you will end up paying.
All you wanted to do was to make a safe place for your tenants and protect your building. You would have been better off doing nothing. Doing nothing would have required your tenant to decide for himself if the apartment was safe and not relied on your assurances and the implication of the construction of the posts.
Another example: You advertise your building as “secure.” After all, you have enclosed parking that requires a card to get into the lot and you have full-time security in the building. Still, one of your tenants is raped and robbed in your parking lot. She sues you and wins. Once again you assured security and your tenant mistakenly relied on your assurances.
The key here is that if you ever imply that something is safe and secure, it had better be impregnable. Otherwise it may be better to do and say nothing at all. It seems as if “no good deed goes unpunished” when you’re a landlord.
The reason for this caution is that in our increasingly litigious society, people always want to blame someone else for what happens to them. When lawyers sue, they look for the person or company with the “deep pockets” and with assets they can grab.
What should you do?
1. Never, never, never advertise or imply that your rental property is “secure.”
2. Always do repairs carefully and the best they can be done, supervise and inspect the work of contractors vigilantly, but never tell or imply to a tenant that a repair makes it “safe.”
3. Make sure your properties meet current building code as much as is practicable.
4. Get an “umbrella” liability insurance policy, if you don’t have one already.
5. Investigate protecting your assets by forming a Limited Liability Company, a Corporation, a Limited Partnership or through asset protection plans such as guardian trusts.
Owning rental property can be financially rewarding if you do it right and protect what you own. But never say “safe,” and never say “secure.”