Property Management

Identifying and Addressing Liability in Apartment Management

by Victoria Cowart

Property management is a liability-rich endeavor. So much so that the National Apartment Association Education Institute (NAAEI) offers a Certified Apartment Manager (CAM) course, and there is one full module on risk management. It is, in fact, a FIVE-hour module. As with all NAAEI programs, the CAM program is worth your consideration. 

The module covers risk management, risk assessments and minimizing risks—financial, physical, liability, environmental, employee and more. The most difficult part of risk management, in my personal (and non-attorney) opinion as a long-term operator, is seeking out and discovering risk—uncovering risks that may be present that we are unaware of that may pose an unusual and unreasonable risk to those who visit or live in our communities. 

With customers, clients, team members, suppliers and more all vying for our time each day, how do we go out and find risks that we do not know about? And how do we then resolve them, and thereby prevent liabilities from rearing their head—and potentially injuring our valued customers and visitors who we care for each day?

A recent ruling by the North Carolina Supreme Court touches on this concern. Despite the heartache of the underlying incident, in which a child was severely injured by a dog attack at a rental property, the ruling was unanimous in favor of the landlord. In essence, the court ruled that the “landlord can’t be held liable for a child’s injuries caused by a dog owned by tenants because he wasn’t told the animal posed a danger to visitors,” according to this Associated Press article on the decision.  

As the legal proceedings showed, the landlord was not made aware of a previous biting incident involving the dog. The renters posted “beware of dog” signs at the property after that first incident, and put the dog on a chain when children were visiting. A “deposed property management expert had testified for the plaintiff that a landlord has a duty to examine potential problems if the landlord sees a ‘beware of dog’ sign, calling it a ‘flashing red light,’” according to the AP. “But posted signs and the chain in the yard aren’t enough under the law for the landlord to know that the dog posed a danger, [North Carolina Supreme Court] Chief Justice Paul Newby wrote for the court.”

So, what does this all say or mean? In short, liability situations or policies can be discontinued, retained, transferred or controlled. Those are our options when dealing with risk. These renters took liability control actions and deployed liability control techniques—the signage and the chain—yet those actions were used against the landlord. As most of us know, it comes down to what we knew or should have known in such situations. We hear that again and again in liability cases, and in life in general.

This then reinforces that we should ask the right questions when addressing liabilities, document those answers, and then periodically ask those questions and document those answers again. Do what a “reasonable” person would because that is the one standard the courts will hold us to. And then, be sure to act on what you learn. Knowledge without action may be the end of your defense and cost you sleepless nights of regret.

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