The LandLord Advocate May 2012

Lead Article:

CT courts take another bite out of landlord property rights.

As property owners and managers, your rights and responsibilities are often molded by the state legislature and local town council into quite the complicated mixtures of do’s and don’ts. Whether it’s zoning laws, building codes, or fair housing laws, the web of restrictions and limitations imposed on you is not easily navigated. To complicate things further, the courts often invoke changes to these rules that are all but nearly impossible to interpret. A recent CT appellate court decision has done just that.

To help clarify the change, and how it affects you, let’s look first at the previous rule, than cross-reference that against the new rule…

The Previous Rule

As a landowner, the previous rule regarding your legal “duty” on your property was that you may be responsible for someone injured on your property if you could reasonably foresee the type and manner of injury that was suffered. In English, if you left a large sink hole in the middle of your property, it is reasonable, the courts would say, for you to expect that someone might come along unaware of the sink hole, fall into it or trip over it, and suffer a broken bone.

Without getting into the details of whether or not the person should even have been there (or their own accountability for their actions), this previous rule is at least intellectually decipherable. The assumption is that as a landlord, you are responsible for knowing the condition of your property (and whether that condition could result in an injury suffered in a likely manner), and that because of that condition, you may be responsible for any resulting injury. Whether or not we agree with the rule, it seems easy enough to understand conceptually.

The New Rule

Now, the change. CT’s appellate court recently changed the rule, and unfortunately, not in your favor. In a case involving a landlord and his multi-family dwelling, the court expanded the landlord’s responsibilities under a rationale that the manner of the injury need not be foreseeable, just the type of injury. Read on to understand more…

The following facts were presented to the court:

The landlord owned a 6-family house.
The backyard behind the house was strewn with, among other things, rocks and bricks.
Several adults were supervising their children at play in the backyard, when one of the children wanted to see if he could break one of the rocks by dropping it from the third story of the building.
The child warned others below to clear the area because he was about to drop the rock.
Despite the warning, one young girl remained in the drop area and was severely injured by the falling rock dropped by the other child.
The parents (tenants of the landlord), sued the landlord for damages related to the little girls injuries.

Originally, the trial court found in favor of the landlord, concluding that the landlord had no responsibility for the injuries because it was not reasonable for the landlord to expect that the girl’s injuries could occur in the manner in which they did.

The parents of the injured little girl appealed the trial court decision and the CT appellate court disagreed. The trial court decision was reversed and sent back to the trial court with a new rule in place. As long as the type of injury is foreseeable, then the manner in which it occurred is not part of the inquiry as to whether the landlord is responsible in some way for the injury. In English, it does not matter that:

The one child carried the rock up three flights of stairs,
That he warned the crowd of his intent to hurl the rock to the ground,
That the little girl refused to move, and
That the adults on the scene refused in intervene in any aspect of the situation.
The only factor that a jury should consider in awarding damages to the little girl is the type of injury she suffered – in this instance, an injury from a rock found in the backyard.

Implications

While subtle, this new rule expands the responsibility and liability of a property owner further than previously contemplated. While also rather expansive, the previous rule at least allowed for the result seen in the original trial court discussed here – the case was thrown out in favor of the landlord because the trial court determined that the landlord should not be expected to foresee that the first child would take the rock off the ground, climb to the top of the building and launch it down to the little girl’s unfortunate injury. Simply, it was not reasonable to expect the landlord to predict the impending injury.

The new rule now means that the landlord need only be expected to contemplate that a rock on the ground on his property may hit someone in the head, period, and that the landlord may expect to stand trial to determine if he should be legally responsible for such an injury.

This nuance greatly expands the duty and responsibility of landlords and at a minimum exposes them to the possibility of more claims for damage and injuries occurring on their property.

Our accompanying quick tip provides useful information on how to ensure you are adequately protected against this new rising threat. Concerned or have further questions? Contact your landlord attorney to discuss the legal ramifications of this new rule further.

Quick Tip:

Demographic trends continue to support apartment industry.

It is often the general rule that first-time home ownership comes with marriage and/or the starting of a new family. Two life-changing moments that historically have not proven beneficial to the apartment industry. However, recent trends announced by an apartment industry representative, may provide very positive news for landlords:

From the 1980s to 2010, the percentage of 25-29 year old people in the United States that have never married, more than doubled from 25{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc} to 55{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc}; and
From the 1970s to 2000, the percentage of women in the U.S. without children almost doubled from 15{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc} to 26{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc}.

Translation – more single people and fewer families.

Moreover, Fortune magazine reports that U.S. households consisting of only one (1) person rose to 28{b3839be935df112798d4ec5997aa1a27aa9a9725854b075bcbd0000f0c7f06fc} – the highest in United States history – and that those households spend more than do their married counterparts without children.
Both studies confirm that these are exciting times to be in the apartment industry. For example, in many parts of Connecticut, landlords are investing heavily in renovation and remodeling programs as we are seeing a substantial and sustained trend toward higher rents. Property owners and managers are working diligently to take advantage of improvements in the marketplace.
Our advice – ensure you have a good landlord attorney in place now to support any marketing and resident retention programs you plan to implement during this upward market trend. Having the right representation in place will ensure that you can effectively, efficiently, and quickly address any problem tenants who may negatively affect not only your community, but also any cash flow you may have chosen to invest.

Quick Tip:

New court ruling may require changes to your insurance policy.

As discussed in this month’s main article, the CT appellate court has changed the rules a bit on property owners regarding liability for injuries occurring on their property. Unfortunately, this means you now have homework.

Whether you like it or not, you need to review how this new rule affects the protections provided under your current insurance policies. Does the change create gaping holes in the coverage, or in the defense of claims contained in your premise liability insurance? Now is the time to find out – before you find yourself in a situation defending a claim for unforeseeable injuries where your insurance company is then attempting to deny you coverage. Additionally, you need to be sure that you are fulfilling all of your required responsibilities under that policy, ensuring uninterrupted coverage from any type of claim.

Lastly, as spring cleaning draws to a close and outdoor activities begin to multiply, take some time to proactively ensure you never face one of these situations to begin with. Inspect your common areas for risk-laden situations that can do nothing more than create potential problems for you and your company. Make repairs and do proper clean-up so that you don’t even have to worry much about what your insurance policies say. And once in place, be sure you work diligently to maintain that new, high standard – ensuring nothing but safe and happy customers.

Quick Tip:

Average security deposit rose in 4th quarter of 2011, but number does not tell whole story.

TransUnion recently reported that the average national security deposit rose $15 in the 4th Quarter of 2011 to $284 (compared to the same period in 2010). The data was compiled after a review of 200,000 rental applications contained in its proprietary rental-screening database. If nothing else, this report may reflect the beginning of a trend toward higher security deposits as the rental market continues to be strong nationally. However, Connecticut landlords should view these numbers with some skepticism, at least when evaluating their own security deposit demands of new tenants.

Many states allow landlords to lock-out tenants who do not pay the rent by a certain date, and some even allow the landlord to sell the tenants’ personal property left in the apartment to compensate them for lost rent. As our local readers are acutely aware, Connecticut state law is quite different regarding the removal of a nonpaying tenant, however it does allow landlords to use security deposits to help cushion the blow.

In Connecticut, tenants have a broad range of protections under state statute that require landlords to go through a summary process (eviction) case to regain possession of a unit if the tenant violates the lease, rules and regulations, or governing statutes. For example, with a nonpayment of rent case, a residential tenant in Connecticut is entitled to at least a notice to quit. If the tenant fails to comply and vacate the apartment, landlords must then serve the tenant with a complaint and file it in court.

This process can take time, especially if your landlord attorney does not draft, serve, and file the necessary paperwork in a timely fashion. Luckily, Connecticut’s statute governing security deposits recognizes this fact. First, it allows landlords to collect up to two (2) months of rent as a security deposit in addition to the first month’s rent. Second, landlords may use that security deposit (after the tenant vacates and returns the keys, or is evicted) to pay for damages that the landlord incurred from the tenant’s violation of the lease, rules and regulations, and governing statutes.

Therefore, while it is interesting that the national average security deposit is increasing, it does not necessarily mean that it is a good idea for Connecticut landlords to follow suit – doing so eliminates one of the statutory protections for Connecticut landlords.

Contact your landlord attorney if you have questions about Connecticut’s security deposit statute and its requirements, and – better yet – talk with your attorney about speeding up the legal work to minimize your lost income.

Quick Tip:

Set high standards and stick to them.

This month, I have the awesome fortune of writing to you from the greatest place on earth – at least if their advertising is to be believed. What it means, though, is that I have had an opportunity to test out the reputation of the most highly reputed service company in the world. And, I must say I am impressed.
I have had two occasions to raise to their attention a situation with which I was disappointed. Nothing serious, but small complaints that I wanted them to hear. What I observed was a well tuned organization prepared to address any concern, no matter how small, ensuring that I was satisfied with the outcome right away.

I didn’t get any special privileges, nor was I seeking any. I didn’t get any complimentary offerings, nor did I want any. What I got was something that any service company can give with little or no expense – an answer. Someone took the time to hear my concern and provided me an answer. In one instance, it was an answer with which I disagreed, but it was an answer. The gnawing uncertainty that had eaten at me since the question cropped up was reduced to a simple gas bubble because I now, at least, knew the answer. And, the answer was simple and simply explained.

So, why the title to this tip? The company’s policy is the high standard. They get answers to the questions and make sure their guests’ concerns are heard. With millions of guests each year, that’s a pretty high standard. How do they stick to those standards? Simple, honest, thoughtful listening and employees who believe in the company’s mission of perfect customer service. No, the experience wasn’t perfect, but their dedication to that standard satisfied my need for understanding.

Perhaps all service companies and individuals, yes I am talking to landlords, can learn from that experience. I know many who already have.

DISCLAIMER:

The reading of this newsletter does not form an attorney-client relationship. The contents of this newsletter are for informational purposes only and do not constitute legal advice. Nothing in this newsletter is intended to imply or predict the outcome of any legal matter that you may be considering or be involved in. The Landlord Law Firm makes no warranties of any kind regarding the information contained in this newsletter.