Owner Liability for Acts of Tenants – Article by Beth A Grimm

Article by Beth A Grimm, P.L.C

When an owner of a condo or townhome places a tenant, care should be taken to screen carefully. Some owners are desperate to rent their homes and so they do so without regard to careful screening or introducing any situation that might cause a rift between the tenant and their neighbors.  Sometimes “bad stuff” just happens. Whatever the case, if your tenants cause problems, it becomes the owner’s problem too. Here is a question received recently:

“I  have a question about owner liability for acts of their tenants. In my HOA, a  tenant of the property (not an owner of the occupied unit) left town with a  toilet overflowing. The overflowing toilet caused damage to several other  units. Is the owner of the property from which the leak originated liable for
ensuing damage to other units?”

The  answer as to the bottom line question is YES, YES, YES and a big fat YES! The owner holds ultimate responsibilily for any damage caused by tenants.

Several questions arise in a situation like this because the inquiry does not stop at the  question of who is at fault. The perhaps more important question is “who pays? What the governing documents say is important because  they provide guidance about “base line” responsibility. When the documents say that the owners  are responsible for damages to their units, the definition of the unit becomes important because it varies  between townhomes which are generally described as the entire Lot and condos  are generally described as airspace bounded by the surfaces of the exterior walls. Owners may be responsible for all repairs to the dwelling, including their personal  property. That does not mean that is the end of the inquiry.

Other important  factors include whether the owners voluntarily insure (or are required to) for accidents like  this. Sometimes the documents commit the owners to get an individual policy  which would be in addition to the master coverage the association carries, to  replace flooring, wall covering, cupboards and personal property and the like.  And some documents say that if owners do not do that, they can’t come to  another party to recover the insurable losses. In other cases, the documents  are silent on responsibility. In any case, if a loss is caused by a  controllable situation like an overflowing toilet in one unit, and there are  damages in other units, the others probably have a legal cause of action to recover  from the negligent party, i.e., the tenant, as well as the party responsible  for the occupants, which would be the owner of the unit. If the owner is held  responsible he or she is probably entitled to seek recovery of any losses they  have from the tenant. A good lease will say this – that the tenant is responsible for any damages caused by the tenant that are not insured, and a  good lease will require the tenant to carry their own rental coverage.

The  same situation applies if the tenants get into fights with their neighbors, let  their kids run wild, cause a rift at the pool, are allowed to have large  threatening dogs, ride loud motorcyles, or are prone to do anything that might  cause a nuisance. If you (as an owner) place such tenants, you are likely to hear from the  association or the neighbors when the complaints roll in. Most people these  days take their complaints straight to the association, and not to the source  of the problem, especially if they fear repercussions or retaliation because of  the complaints. But in the end it is the owner’s responsibility to take care of the problem.

It  is critically important to choose good tenants and emphasize the importance to them of  notifying owner of a repair that needs to be made (such as a running toilet) if the tenants are not capable of  making it. If responsibility is properly placed by the documents, including the  CC&Rs and the leases owners use, the end result is that the person who  caused the damage will be ultimately responsible and should insure for such  possibilities to the extent possible. Sometimes, the various insurance  providers will argue about responsibility too. Sometimes the responsibility needs to be shared.

There  is a very helpful article on my website at www.californiacondoguru.com  entitled “Water Leaks, Start To Finish”, that will provide guidance on the best  way to think about and handle water leaks and resulting damage. There is also a  companion blog to this one which is accessible on the main page of the site  (the California Condo & HOA Law Blog) that speaks specifically to what an  association should do when a situation like this arises.

Click here to view original article.

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