By Peter Moran
Property managers have a hard gig, to say the least. The sheer scale of their responsibilities is staggering and professional negligence claims are, unfortunately, not unusual. But clear communication between property managers and landlords can go a long way to mitigating the risk of exposure to a claim.
When it comes to property management, anything can happen and sometimes does – as these recent real-life professional indemnity insurance claims illustrate. Nothing is too far-fetched and property managers need to be prepared, putting steps in place to mitigate the risk of a claim succeeding against them.
- Dodgy roof access – A ladder was affixed to the roof of a residential rental property but had been in need of maintenance for some time. The agent had informed the landlord that the ladder needed to be properly affixed. Unfortunately, the ladder collapsed when the tenant was climbing it to gain access to the roof, resulting in injury. The tenant made a claim against the property manager.
- Collapsing stairs – Timber stairs led up to the rental property. A visitor was using the stairs when they collapsed due to wood rot, resulting in injury. The visitor sued the property manager for failing to ensure the stairs were properly maintained, especially given that the poor condition of the stairs was specifically pointed out during a number of periodic inspections.
- Rotten floorboards – An older house had rotten floorboards. It was evident from periodic inspections that someone had taken rudimentary steps to fix the problem, but whoever did the work was clearly not a qualified tradesperson. The tenant, who was unaware of the inadequacy of the remedial work, put her foot through the floorboard and sustained substantial injuries. She brought a claim against the property manager for failing to ensure the repairs were carried out correctly and appropriately.
In each instance, the successful defence of the property manager was largely dependent upon the quality of communications between the property manager and the landlord.
In such cases, the injured party will usually make a claim not only against the landlord, but also against the property manager. Why? Because the property manager’s agency is a better ‘target’ because of the insurance it has in place.
To successfully defend these types of claims, you need to be able to demonstrate that you have effectively communicated with the landlord (e.g. emails, letters or file notes). Ideally, where these sort of issues are identified during a periodic inspection or are notified by the tenant, you will be able to demonstrate that you have notified the landlord in writing of the issue, advised them of the need to take steps to remedy the problem and have set out the risks if action isn’t taken (i.e. personal injury and litigation).
Additionally, property managers should consider encouraging their landlords to take out their own liability cover. This means that if an unfortunate incident does come to pass, you may not be the first one in the firing line when it comes to any claim.
The information contained in this article, which is current as at the date of publication, provides only a general overview of subjects covered. It is not intended to be taken as legal advice or advice regarding any individual situation and should not be relied upon as such.
Realcover is underwritten by QBE Insurance (Australia) Ltd and managed by JLT.