If you're a real estate investor, you likely have a lot on your plate—from juggling properties to ensuring profitability. One thing you don’t want to overlook is the topic of premises liability. Understanding your potential risks and legal responsibilities can save you from costly lawsuits and help protect your investment.
What Is Premises Liability?
Premises liability refers to a property owner or occupier's legal responsibility to ensure their property is reasonably safe for visitors. Real estate investors, as property owners or landlords, are typically on the hook if someone is injured on their property due to unsafe conditions. Depending on the case, these liabilities could range from slip-and-fall accidents to structural issues or even criminal activity.
For instance, imagine you own a strip mall where the parking lot lights are broken. If a shopper trips in the dark or is a victim of theft, you could be held liable for failing to maintain the property’s safety.
Who Can File a Premises Liability Claim Against You?
Understanding who might file a claim is crucial. There are three main categories of people who enter your property:
- Invitees are individuals you invite onto the property for business purposes, like tenants, customers, or contractors. They are owed the highest duty of care, meaning you must actively ensure the property is safe for them.
- Licensees - These are individuals who enter your property for their own purposes but with your permission, such as social guests. You’re still required to warn them of any known hazards.
- Trespassers - Although you don’t owe trespassers the same duty of care, you can still be held liable if you intentionally create hazards that harm them or fail to address obvious dangers like an uncovered well.
Common Risks for Real Estate Investors
The risks that come with owning properties are significant but manageable if you’re aware of them. Here are some common premises liability risks for real estate investors:
1. Slip and Fall Accidents
One of the most common types of premises liability claims, slip-and-fall accidents can happen for many reasons—an icy sidewalk, a wet floor in a lobby, or uneven stairs. A single neglected hazard could cost you tens of thousands in legal fees.
Example: A tenant’s guest slips on an unmarked icy walkway leading to the rental unit. They break their wrist and sue you for medical costs.
2. Insufficient Security
If someone is harmed on your property due to lack of reasonable security measures, you might face a lawsuit. This could include inadequate lighting, broken locks, or the absence of surveillance in high-crime areas.
Example: At a commercial property you own, a customer is mugged in a dark parking lot that lacks proper lighting. They claim you failed to provide adequate security and seek damages.
3. Building Code Violations
Failing to comply with local housing or building codes can lead to major legal challenges. This might include a lack of proper handrails, malfunctioning smoke detectors, or electrical hazards.
Example: A fire breaks out in your multifamily rental unit, and a tenant gets injured trying to escape because the fire exit was obstructed. Upon investigation, it’s found that the building doesn’t meet fire safety codes.
4. Pool and Recreational Area Accidents
Pools, gyms, and playgrounds can be great amenities but also accident hot spots. Drowning incidents, faulty gym equipment, or poorly maintained playgrounds can hold you liable.
Example: A visitor to your apartment complex drowns in the pool after the "No Lifeguard on Duty" sign was removed and not replaced. You could be held responsible for not adequately warning of the danger.
Steps to Mitigate Your Liability Risks
While the risks may sound intimidating, the good news is that you can take proactive steps to minimize your exposure. Here’s how:
1. Regular Property Inspections
Make routine inspections a priority to identify and address potential hazards before they become accidents. This means checking for things like loose railings, cracked pavement, or faulty lighting. Establish a checklist to ensure nothing falls through the cracks.
2. Hire Qualified Property Managers
Hiring a qualified property manager can help you stay on top of repairs, maintain safety standards, and respond quickly to tenant or visitor concerns if you're managing multiple properties.
3. Stay Up-to-Date on Local Codes and Laws
Laws and building codes vary by location and are often updated. Ignorance is not a defense, so make sure you're compliant with local regulations for fire safety, accessibility, and structural integrity.
4. Purchase Adequate Insurance
Investing in a robust premises liability insurance policy can provide financial protection if a claim is made against you. Make sure your policy covers both legal fees and potential damages.
5. Communicate with Tenants
Encourage tenants to report hazards promptly. A simple email or hotline for maintenance requests can go a long way in keeping your property safe.
6. Use Warning Signs
When hazards can’t be immediately addressed, place clear warning signs to notify tenants and visitors. For example, if a floor is wet, set up a caution sign to protect everyone (including yourself) from harm.
What Happens if You’re Found Liable?
If you’re deemed liable in a premises liability case, the damages can include compensation for medical bills, lost wages, and pain and suffering. Beyond the financial burden, a liability case can harm your reputation as an investor or landlord, making it harder to retain tenants or attract new business.
Apart from damages, premises liability cases can lead to time-consuming and stressful court battles. This is why proactive risk management is always the smarter option.
New Hampshire Residential & Commercial Real Estate Attorneys
At Upton & Hatfield, LLP, we understand the complexities and challenges that come with owning and managing real estate properties. As experts in premises liability in Concord, NH, we offer comprehensive legal services to help safeguard your investments. Our skilled attorneys guide you through identifying liability risks, implementing sound risk management strategies, and ensuring compliance with changing legal standards. We invite real estate investors to reach out to us for personalized consultations and robust legal solutions that protect your assets and promote peace of mind. Contact Upton & Hatfield, LLP today at (603) 634-9560 to ensure your property is secure, compliant, and ready for success in Concord, NH.