21 August 2020
By Peter Moran
Professional negligence claims against property managers are on the rise. Allegations can sometimes verge on the bizarre, which underlines the reality that landlords and tenants alike are looking for someone to blame when problems arise. Here are some recent examples of real-life claims.
A British tourist was occupying a property over the Christmas period on a sub-lease. During his stay, he was injured when a ladder he was using to access a rooftop terrace collapsed.
The primary tenant had previously made a number of complaints to the property manager about the safety of the ladder. The property manager had passed these complaints on to the landlord. On different occasions, the property manager had asked for authority to arrange maintenance of the ladder, however this authority was not given by the landlord.
Despite knowledge of the need for the ladder to be fixed or replaced, the primary tenant nevertheless continued to allow short-term holiday stays on a sub-lease basis.
The injured sub-tenant sued the primary tenant, the landlord and the property manager.
TIPS
Another potential area of exposure is where, by reason of the ingoing inspection report or ongoing periodic inspection reports, a tenant may allege that the property manager was on notice about particular issues.
In a recent case, a tenant’s guest was injured when they fell off the verandah due to the balustrade giving way. The ingoing inspection report referred to the balustrade being damaged and wearing away.
In another case, a tenant made a claim when they suffered injury due to timber floorboards giving way. A periodic inspection report prepared by the property manager including photos showing the damaged floorboards, including a number of existing holes. Despite this, nothing was recorded by the property manager in relation to repairs being carried out or recommended maintenance. However, a later periodic inspection report did show some form of repair to the floorboards.
A tenant occupying a property wanted access to the carpark, despite the fact that his lease did not provide a parking space. The property manager agreed, but told the tenant that there was no remote control available for the garage door and he would have to open it manually.
The tenant sliced the top of one of his fingers off when closing the garage door. In a claim against the property manager, he argued that he should have been warned of the possibility that injury might occur.
A recent case before the NSW Civil and Administrative Tribunal saw a landlord seeking an order for repayment of management fees paid to the property manager.
The landlord claimed that the property manager had breached the Management Agency Agreement by failing to disclose that the tenants had two dogs before the Residential Tenancy Agreement was entered into. The landlord also asserted that the property manager, without authority, gave approval for the tenants to keep the dogs at the property.
While the landlord’s application for repayment of the management fees was unsuccessful, the property manager had to go through the frustrating and time-consuming process of responding to the application, preparing evidence and arranging representation.
DISCLAIMER 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’s professional indemnity insurance policy has been designed with your needs in mind. For more information and to discuss your insurance needs, please contact Realcover by speaking with JLT representative on 1800 990 312 or email [email protected]
PETER MORAN is a Partner at Colin Biggers & Paisley (which is a panel lawyer of QBE).
Realcover is underwritten by QBE Insurance (Australia) Ltd and managed by JLT.
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