Understanding Property Management Negligence
Negligence, in legal terms, is a failure to take proper care in doing something, resulting in damage or injury to another. In the context of property management companies, this means that managers have a legal duty of care to the property owners and tenants in the buildings they manage. Where that duty of care falls below what could be reasonably expected, and damage or injury occurs as a result, the management company can be sued for negligence.
Property management companies often have a lot of responsibilities, and despite their best intentions, it’s easy for mistakes to occur . Some of the most common negligent acts by property management companies include:
Although not an exhaustive list, the above examples represent some of the most common negligent actions in property management. In some circumstances, failing to give notice to a tenant before entering the apartment is actually illegal. Entry without permission or notice can result in eviction for the tenant, as well as damage awards against the property management company.
Legal Grounds for Suing Property Managers
When it comes to suing a property management company for negligence, there are four primary legal elements that must be proven: duty of care, breach, causation, and damages. These legal concepts are heavily dependent on the laws of the state in which the suit is filed and the contractual agreement between the resident and the property management company. However, in general, they still apply fairly universally when such a suit is brought against a property manager. Below we describe the basic meaning of each of these terms and provide an example of how they might apply to a lawsuit:
Duty of Care
Put simply, this means the property manager has a recognized legal obligation to act in a manner similar to that of a reasonably prudent property manager. Examples of a property manager breaching his or her duty of care include failing to keep common areas safe and well-maintained, neglecting to properly screen tenants, or neglecting to set proper rental rates before showing a unit.
Breach
A breach of duty occurs when that duty of care is disregarded. For example, a property management company might breach its duty of care by ignoring persistent reports of leak in a tenant’s unit. A reasonable management company would investigate the report and decide whether leak was indeed occurring and, if so, remedy the situation.
Causation
Once it has been determined that a property management company breached its duty of care, the next step in a lawsuit is establishing causation. In this case, a tenant of the property would argue that the property management company’s breach directly caused the harm for which he or she is seeking damages. For instance, the courtroom would likely consider whether a leak that a management company ignored led to serious water damage to the tenant’s possessions.
Damages
In order to seek damages (i.e. financial compensation), the plaintiff must first prove that the breach of duty caused harm. Damages can take many forms. The plaintiff may have suffered physical injuries in the apartment or lost property due to the alleged negligence of the property manager. In these instances, the plaintiff would likely seek damages for medical expenses and other economic losses. But not all property managers are responsible for physical damages. In the case of negligent property management, the plaintiff may be seeking compensation for future financial losses. For example, suppose a property management company disregards a tenant’s report about a leak that later spreads to other buildings in the apartment complex. If one or more of those buildings need to be shut down for months and the resident loses hundreds or thousands in rent, he or she may seek lost rental income as well as any non-economic damages, such as for pain and suffering.
Putting it All Together
Now, let’s imagine our hypothetical tenant—Jane Smith—who rents an apartment at 101 Pioneers Lane. Jane’s lease agreement is with Acme Property Management, LLC ("Acme"). For two months after moving into the apartment, she repeatedly informs Acme that there is a leak in her unit. Four months later, the leak has spread to other units in the complex. At this point, Acme repairs the leak, but too late—the leak causes $100,000 worth of damage to the buildings resulting in two units being vacated for the duration of the repair (20 weeks) and an income loss of $6,000 per unit. Acme also incurs $2,500 in general expenses for the "repairs." Acme’s lease agreement requires for its residents to carry renter’s insurance, Jane’s policy covers $20,000 of her personal property damage. Acme may be liable to Jane Smith for any uninsurable losses or for any deductibles Jane incurs in her claim. Acme may also seek to recover its losses from the tenant who reported the leak.
This example helps illustrate the interplay between all four of the legal elements discussed above. Acme had a (1) duty of care to address Jane’s concerns regarding the leak. Acme clearly (2) breached that duty of care by ignoring her concerns for two months. Acme’s breach of its duty of care directly (3) caused the leak to worsen and affect other buildings on the property. Had Acme addressed the problem when it was first reported, Jane would have experienced far less damage in her apartment and none of the damage to other tenants’ apartments. Because it can be reasonably inferred that Acme’s neglect caused Jane’s damage, she is entitled to (4) compensation for her losses. The nature of her losses is such that a court would permit her to recover the following: $80,000 in unreimbursed personal property damage, $14,500 in unreimbursed losses sustained during the 20 weeks the building was shut down, $7,500 in unreimbursed losses in rent from the two shut down apartments, expungement of Acme’s lien, and $25,000 in reimbursed expenses for attempts to mitigate/minimize the damage.
As you can see, demonstrating all four elements of a negligence suit against a property management company is no small task. Indeed, the most difficult element to prove may be the "damages," because plaintiffs often do not have carefully compiled lists of damages up front. It is, however, essential to present as many quantifiable damages as possible because courts will not award damages for speculative harm.
Steps to Take Before Filing a Lawsuit
Before embarking on the litigation path to vindicate your rights in a situation involving negligence by a property management company, you should consider the likelihood of prevailing and the damages that might be recoverable. To determine the viability of your claim, you should consider the following steps:
1. Document the Problem
The first thing you should do is document everything. Not only is it helpful to your future case, but if you do not document the problem, you will have no evidence later. You might be thinking, "This is obvious Chris, obviously I would document the problem." But, evidentiary requirements are tricky in court. Not only do you need evidence, but you also need the right type of evidence. For example, emails are great evidence, but only if you can get them into court. Think long and hard about what evidence will be required to make your case and how you are going to get that evidence into the courtroom.
2. Consult with an Attorney
Once you gather evidence, it is a good idea to meet with an attorney to discuss the merits of your case. You may have a solid case, but the damages are just not enough to file in court. The attorney will be able to tell you whether or not your case is worth the time and money to file a lawsuit.
3. Attempt Alternative Dispute Resolutions
If you have a viable claim, the next step is to determine whether or not you should file a suit. This situation falls squarely into the category of a "six of one, half a dozen of the other" type situation. If you file in court, the property management company will most likely file a counterclaim against you in small claims court for management fees. If you file in the Department of Commerce and Consumer Affairs, there is no risk of counterclaim, but it may take a long time to get into court and there is no appellate review. Additionally, you may be limited in the damages you can recover in consumer court. Weigh your options with your attorney to determine which route is best for your particular situation.
How to Prove Negligence in Court
Proving a property management company’s negligence in court can be a complex process, but with the right evidence and expert representation, you may be able to successfully build and present your case. Since this type of litigation relies on circumstantial evidence—and not eyewitness testimony—to prove a property management company’s failure to act, it’s crucial that you provide the relevant evidence to support your claims.
Take a look at some of the most common types of evidence used when suing a property management company for negligence:
• Security footage: Video surveillance footage is one of the best forms of evidence in negligence cases, as it provides an objective depiction of the events in question. Be sure to provide the date and time the footage was recorded, and make sure your security footage is current and up to date (consider replacing the footage every 30 days). Security footage is difficult to manipulate or falsify, which increases its credibility in court.
• Phone records: Phone records are often produced and sent by call logs from property management companies, which can help shed light on the extent to which a property management company was aware but failed to report a hazard. For example, if a landlord or other party called in to report a maintenance issue, having a clear record of that information will make it easier for your lawyer to prove the property management company was negligent.
• Pictures and videos: If you notice signs of water, mold or other hazards on the property, thoroughly document all of these issues with photos and videos. Take care to note the date and time of when these pictures were taken, and consider keeping an updated camera roll available at all times in the event of an urgent safety or maintenance issue that requires documentation.
• Witnesses: While you certainly won’t have witnesses’ accounts in a court case against a property management company, there may be other parties that can provide testimony in support of your claims—such as a maintenance worker, a tenant in the same unit or neighbors. Consider whom you know that is familiar with the property and might be able to testify on your behalf.
Evidence to prove a property management company’s fault in court typically should not be presented unless the evidence was obtained in accordance with the law. We recommend consulting an experienced attorney about how your evidence was collected to ensure it can be used in court.
The burden of proof falls on the tenant when pursuing lawsuits against property management companies, so your attorney’s guidance and abilities can be invaluable in the outcome of the results of the case. If you’re considering suing a property management company, consult an experienced attorney about how to prove negligence in court.
Potential Outcomes and Damages
In the context of suing a property management company for negligence, there are several potential outcomes of a lawsuit. When a lawsuit is filed, the case can either be dropped because of the availability and sufficiency of evidence, settled out of court so that neither side has to face a jury, or it can go all the way through to a jury trial where a verdict will be reached.
How much the plaintiff gets paid for their damages, should they win their case , depends on the type of damages requested in the lawsuit:
– Compensatory damages: Compensatory damages are meant to compensate the injured party for their actual and direct losses. This can include things such as the following:
o Medical expenses
o Lost wages and future lost income due to the incident
o Damage to personal property
o Pain and suffering
– Punitive damages: Punitive damages are meant to punish the defendant for extreme examples of negligence or disregard for the safety of others. In property management cases, punitive damages are rarely awarded unless the negligence is particularly egregious.
Choosing the Right Lawyer
When choosing a lawyer to assist you with a potential property management company negligence case, it is important to find an attorney that has specific knowledge of the laws in your area. In the United States, every state has different laws and regulations governing their property management companies. Additionally, every state has different statute of limitations periods. This means that if any time has lapsed, you may no longer be eligible to place a claim. You want to choose a lawyer with the relevant experience to make sure all deadlines are met, and that none of your rights are overlooked.
A leading reason people opt to hire a lawyer to represent them rather than going at it alone, is they have the comfort in knowing a professional is familiar with the law, and can advise them on the best course of action. There may be local rules and procedures that help you, or hurt you, that an inexperienced attorney would not know.
Additionally, the lawyer will have the ability to choose and retain experts to testify and support your claims. In some cases, it may even be found that the property management company is not the individual or company that should be held liable, and that additional parties may need to be brought in. It is invaluable to have someone who knows the law and can navigate the case presented to him or her without error.
It is also important to find a lawyer you feel comfortable working with on a more personal basis. Upholding your rights and seeking the results you desire takes communication, and lawyers can often times have a busy caseload of other clients or cases.
When speaking to the lawyer or his or her staff, it is important to find out the answer to a few questions: Do you have experience filing property management company negligence lawsuits?
Avoiding Disputes with Property Managers
Preventive measures can help reduce the likelihood of property management disputes. Clear communication between property managers, landlords, and tenants is key. Ensuring that all parties understand their roles and responsibilities helps to avoid future disputes. It is important for property managers to have a clear understanding of their relationship with the landlord. If the property manager has a contract with a tenant, the property manager should go over that agreement to make sure that the tenant knows what they are responsible for during the lease period. Likewise, it is important for the landlord to understand what the property manager is responsible for. For example, if the property manager is responsible for evictions, then the landlord should be aware of the process, schedule, and budget for doing so.
Another good way for preventing disputes is for landlords to educate their tenants on their responsibilities. For example, tenants should be aware of when rent is due and how to proceed if they need maintenance done in their unit. The property manager should be available for any questions or concerns . If the landlord and tenant have questions about the lease, they should contact the property manager before an issue arises.
If the property manager and landlord agree that a lease is not working as expected, the next step may be to renegotiate the lease terms. Similarly, if a dispute arises between the landlord and a tenant, whether it’s one of policies or of billing, the property manager should communicate with the parties to work out the problems without evictions or litigation.
Thorough records are a necessity for both landlords and property managers. It is best practice to keep copies of all contracts. Also, it is a good idea to keep a written log of conversations with tenants and contractors. Moreover, landlords and property managers should maintain regular maintenance schedules for the properties, and keep receipts for all work done. Finally, if a property manager is only appointed for a short period, it is wise to have accurate inventory and condition lists for the property, so that no items can go missing while it is in a tenant’s possession. By following these guidelines, landlords, tenants, and property managers can avoid common pitfalls.
