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A landlord, a managing real estate agent, a delegable duty of care and a set of dodgy stairs

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 [2020] 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.

In Issue

  • 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

The background

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:

  1. the Agent’s obligation to inspect and report included identifying and recording visible or obvious risks and reporting them to the Landlord;
  2. 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
  3. 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.

Yeung v Santosa Realty Co Pty Ltd (2020) VSCA 7 

Barry.Nilsson. Lawyers - Lachlan Doran 

Director of First impressions/Agency receptionist special one day event

2nd August 2019 - Brisbane

Agency receptionist special one day event

Register online here,  or email us name and email of attendees for us to register you manually to save the online booking fee) 

Click here to view all upcoming training events

 

The role of the Director of first impressions is one of the most critical roles for any real estate agency. This event will focus on assisting receptionists and front line staff in excelling in their role, plus tips to assist the licensee, property management and sales team.

This special one day event will include the following topics;

Tips on making the best first impression when on the phone and when people walk into the agency,

Email etiquette tips,

Communication tips when dealing with colleagues and clients/customers,

Tenancy application form best practice completion and processing,

Dealing with aggressive people tips,

Safety tips for you and the office,

Risk management and how the licensee can be supported,

General trust account requirements,

File notes, filing and record keeping,

Message taking best practice for good agency practice,

Mail book recording best practice and why.

Licensee and Agency Administrator training - special one day event

Special one day event - Brisbane July 19 2019 - 9am to 3.30pm

This special one-day event is suitable for all staff members of an agency with focus on the licensee and agency administrator.   Click here to view all upcoming training and special events.

Register online here (or email us name and email of attendees for us to register you manually to save the online booking fee). The event includes arrival tea and coffee, morning tea and working lunch.

The session, presented by Stacey Holt,  will include the following legislative requirements under the Property Occupations Act and the Agents Financial Administration Act (and regulations);

  • Meaning of in charge of a real estate agency
  • Licensee requirements to supervise and train staff
  • Substitute licensee requirements
  • When staff need to be registered
  • What a registration certificate authorises
  • Notifying the Office of Fair-Trading requirements when circumstances change
  • Key compliance and best practice completion tips for residential sales and property management PO Form 6
  • Where some people go wrong in completing the PO Form 6
  • Agency conduct legislative standards
  • Record keeping including electronic record keeping requirements
  • Accounting to clients including mid and end of month
  • Auditing requirements under the PO Act
  • Key trust accounting compliance reminders including receipting, entitlement to fees and disbursement of trust funds
  • An update on the RTRA Act review.

Register online here (or email us name and email of attendees for us to register you manually to save the online booking fee)

ANZAC Day laws Queensland - Lest We Forget

Lest We Forget

Anzac Day and Real Estate - Lest we forget

Real estate offices,  may open only for the purpose of rental transactions and must not sell real estate or conduct open house inspections. More information here.

The Trading (Allowable Hours) Act 1990  (Qld) prohibits the real estate industry from conducting the business of selling real estate on Anzac Day.

Section 34 is set out below. 

34 Real estate sales prohibited

A person must not conduct the business of selling real estate on Anzac Day.

Maximum penalty—40 penalty units.

Property Management Excellence (PME) system podcasts (Member offices only)

Online training podcasts for member office (PME system)

PME system members;  the existing training videos which form part of the system, are going to be replaced with podcasts - the podcasts will be at Member Online and can be listened to via Audio (M4a files) anytime when completed. They will not be on the Apps listed below as it is a membership benefit. Members could login on their smart phone and play whilst travelling and or remote. The audio training can also be heard on your PC in the office.  The future training podcasts will marry up with the chapters of the PME manual (38 chapters). 

The following podcasts (audio training) are currently available for PME system member offices (with many more to come)

# Understanding the PO Act and regulations

# The management agreement PO Form 6 – the law, best practice and completion 

# Scripts for lessors who ask "Why am I paying the management agreement for?", "Why am I paying a letting commission?" and "Why am I paying an administration fee?"

# PO Regulations – what all property managers and salespeople should know 

# When do staff need a certificate of registration

# The Sales Excellence manual (part of the PME system) – an overview

 Click here for information regarding the Property Management Excellence podcast series