Sourced from www.lexology.com 25th February 2020
Who is liable for an injury to a tenant caused by the state of a property the subject of a residential lease? The landlord? The managing real estate agent? Both?
Yeung v Santosa Realty Co Pty Ltd  VSCA 7 considers a landlord’s delegable duty of care to a tenant and issues pertaining to the apportionment of liability between the responsible parties.
- A landlord’s delegable duty of care to a tenant
- Liability for injuries sustained by a tenant under a residential lease
- An agent’s duty to inspect the property and notify landlord of obvious defects
In early 2014, a residential tenant (Tenant) slipped at night on the back stairs of the property she was leasing, causing her to fracture her right ankle (Incident). Relevantly, the stairs had no handrail and were worn, slippery and unlit. The Incident was then reported to the managing real estate agent (Agent) who proceeded to arrange the required rectification works.
The Tenant brought proceedings for negligence in the County Court of Victoria against the owner of the premises (Landlord) and the Agent. It was held they had both breached their duty to the Tenant and were liable for damages - liability was apportioned two thirds to the Landlord and one third to the Agent. The Landlord appealed the decision.
The decision on appeal
The appeal was upheld with the Court of Appeal finding that the Landlord had delegated his duty of care to the Agent and as a result was entitled to a complete indemnification from the Agent.
A central consideration of the appeal was whether the application of the duty of a landlord to take reasonable care to avoid foreseeable risk of injury to tenants can be discharged by the exercise of reasonable skill and care in engaging a real estate agent to take steps to keep the property safe. It was held that such a duty can, in certain circumstances, be completely discharged and delegated to a managing real estate agent.
In coming to this decision, the Court of Appeal made the following critical findings:
- the Agent’s obligation to inspect and report included identifying and recording visible or obvious risks and reporting them to the Landlord;
- the Agent breached its duty of care to the Tenant when it failed to carry out an inspection of the stairs as it was bound to do – particularly in circumstances where the risk of slipping was foreseeable and not insignificant, and where there was a risk of a significant injury; and
- the defects were not latent, were obvious and detection required no specialist expertise. If the Agent had carried out the inspection, it would have identified the defects in the stairs and, upon notification to the Landlord, these defects would have been remedied and the fall would not have happened.
Implications for you
This decision confirms that a landlord’s duty to take reasonable care to avoid foreseeable risk of injury to tenants can, in certain circumstances, be completely discharged and delegated to a managing real estate agent.
For managing real estate agents, it is therefore crucial to understand and appreciate your obligations pursuant to your agreement with a landlord – especially those related to the scope of your property inspections, maintenance reports and required repairs. As this case shows, a failure to adequately perform such duties can attract severe consequences.