Common law in Australia dictates that landlords have a duty of care to guarantee the safety of rented properties. If someone (whether it be a tenant or a visitor to the property) is injured at one of the properties you manage, that person could sue the landlord, the agency and even you.
Did you know that Australia is reported to be the second most litigious nation in the world behind the US? Over the past decade, professional indemnity claims against real estate agencies are the fastest growing in any industry. History shows it is the managing agency that often bears the brunt of any legal action when claims arise as a result of personal injury to a tenant or visitor to the property due to an unsafe living environment. Unaddressed risk has the potential to threaten your livelihood and the reputation of the business you work in. The court system has established that you have a legal responsibility to protect the tenant, even for things that you are unaware of. In property management, ignorance is definitely not bliss.
In 2017, a tenant in Victoria successfully pursued a public liability claim after he was seriously injured when the balcony of a rental property collapsed. His compensation claim was successful because rotted wood in the decking was noted on the previous tenant’s property condition report. While the landlord did replace some beams prior to the next tenant moving in, the repairs were deemed shoddy.
The bottom line is landlords, agents and agencies are highly exposed if a tenant or visitor is injured on their property unless they have made a documented effort to ensure the property is safe.
Professional Indemnity Insurance isn’t enough
Contrary to what many think, Professional Indemnity Insurance isn’t enough to protect you or the agency you work for against claims resulting from a property that is deemed unsafe.
So how do you ensure that a property is safe when you are not trained to assess it for potential safety hazards? This is an issue that the real estate industry has long been struggling to find an effective solution for. While new standards and compulsory legislation have been introduced to address some safety issues (such as smoke alarm testing and pool inspections), they only touch the surface when it comes to common potential hazards found in the home. All property managers have a Duty of Care to provide a safe environment for tenants but the fact of the matter is the ingoing inspection simply doesn’t cut it when it comes to assessing the safety of the home.
How do I protect myself and the agency I work for?
To protect yourself and the agency you work for, all you need to do is send an offer to your landlords explaining the benefits of obtaining a PropertySafe report conducted by fully licensed and insured property safety inspectors. The landlord can choose to accept or decline the offer. If accepted, the inspection is completed and the landlord is sent the report, which includes recommendations for action with a focus on safety. Click here for a sample report. As property manager, you are only advised of any major safety hazards (hazards that are potentially life threatening). The report makes the landlord aware of the level of risk in their property enabling them to take action to mitigate those risks.
The landlord can either refer the issue to you for assistance, request that the tenant be alerted to take the appropriate precaution (e.g. if a paved pathway is found to be slippery when wet) or opt not to take any action. The key is awareness and the fact that by having the report done, the risk to you and the agency is immediately reduced.
Best of all, by sending an offer to landlords to have a PropertySafe inspection done, you will receive Maintenance Manager, the greatest time saver for property managers when it comes to keeping on top of maintenance and repair issues, absolutely free of charge. The two work hand-in-hand to solve your two biggest enemies in your role – time and risk. Click here to learn more about Maintenance Manager.