Lawsuit-Happy Tenants. How to Protect Yourself and Your Investment!

by | Mar 1, 2016

Education

Lawsuit-Happy Tenants. How to Protect Yourself and Your Investment!

by | Mar 1, 2016

Short of a tenant dying due to a property defect, every landlord’s worst nightmare is to be targeted in a nasty lawsuit. But society is becoming increasingly litigious, and landlords – perceived as having deep pockets – are frequently in the crosshairs of plaintiffs looking for a payout.

Defense matters: All it takes is one mishap or misunderstanding, and the real estate asset you worked so hard to acquire is at risk in a lawsuit. Here are just a few kinds of cases where landlords have been held liable for damages, or compelled to settle out of court for significant amounts:

  • A ‘slip & fall’ case on the property or other claim arising from ‘dangerous conditions’
  • Wrongful eviction
  • Mold-related illness
  • A construction defect
  • Criminal activity of tenants
  • Carbon monoxide poisoning
  • Breach of contract allegations
  • Allegation of sexual harassment of tenants
  • An allegation of handicapped or racial discrimination
  • Claims of injury from excessively hot water in bathtub or shower
  • Damage from burst pipes or other maintenance-related causes Dog bite incidents, where the landlord was found negligent, or where the landlord was simply aware that it was a potentially dangerous breed

The list goes on. Part of our management responsibility, and part of our value proposition, is to help protect the landlord from many of these claims. We do so in a variety of ways:

Prevention

The best defense is to prevent an incident from occurring in the first place. Our expertise in maintenance and repair – computerized systems to keep track of inspections and measures taken to keep the property in good repair creates an ongoing chart of preventative maintenance. We schedules and document annual inspection of fire alarms and building units which shields a landlord from allegations of negligence if there is a problem down the road. The same goes for carbon monoxide alarms, and even the scalding incident mentioned above. Most full-time property owners do not have the time to engage personally in the minutia of building maintenance of this type. Your time, after all, has value.

Expertise

We are experienced with the federal, state and local housing discrimination laws and ordinances and can help keep you out of trouble with authorities. This is important because even seemingly innocuous small talk between an inexperienced or unguarded landlord and a potential renter could lead to a later allegation of unlawful discrimination. For example, if a landlord, wanting to be friendly, asked to see a photograph of the applicant’s children, that applicant could later file a complaint with the U.S. Department of Housing and Urban Development alleging that you engaged in unlawful discrimination on the basis of familial association.

As experienced property managers, we have executed thousands of leases and interviewed thousands of applicants.

Our professional expertise extends far beyond the initial interview. We have dealt with managing tenant’s performance and have a high degree of success. When an eviction situation does become necessary however, we will save you a significant amount of time and hassle, and potentially prevent wrongful eviction lawsuits or short-circuit costly delays and defenses to eviction.

Insurance Coverage

In the event a tenant does sue you, for whatever reason, our group property management insurance has some significant insurance coverage, including an omissions insurance policy and specialized liability coverage for property managers. This is in addition to your own landlords’ insurance and umbrella liability policies. Our coverage may help provide counsel to help you mount a defense.

If you are possibly facing a pending lawsuit or have any questions about protecting your investment, talk to us. We have extensive experience!

About the Author

Bruce A. Kahn, CCIM, CPMBruce A. Kahn, , CCIM, CPM, Principal, Designated Broker, Foundation Group is a Managing Director of Foundation Group Investment Real Estate Solutions, a full-service property management and brokerage company. He has earned the designation of CCIM (Certified Commercial Investment Member) issued by the CCIM Institute, and is a CPM (Certified Property Manager) with the IREM (Institute of Real Estate Management). For further information or for a property analysis, please contact him at 206-324-9424 or by email.