How a broken light cost two agents $330k in damages

How a broken light cost two agents $330k in damages

 

Two real estate agents in NSW were recently ordered to pay a tenant $330,000 because they allegedly failed to respond to requests made via email to fix a broken light. The five owners of the property and the agents all denied responsibility when the tenant slipped down the building’s common stairwell in the dark and broke her foot after requesting that the light be fixed. The owners subsequently attempted to sue the agents and vice versa. The agents lost the case.

The tenant sued her landlords and the agents for compensation after breaking her foot due to the fall. The case was brought before the NSW District Court. The court heard that the victim’s flatmate had sent the agents two emails to complain that the light in the stairwell of the building’s common area was not working and that it was “so dark we can’t see anything”.

After the first email, one of the agents sent the agency’s regular electrician to the property who replaced a few lighting components. However, when the agent was sent the second email two months later complaining that the light was out again, there was no evidence to prove that he had done anything. The agent told the court he had verbally instructed the electrician to return to the property to fix the light however, without documentation, he couldn’t prove he had done so. The agent also failed to respond to the tenant’s email.

The Court Findings

The judge found that while both the owners and the agents had breached their duty of care to the tenant, the agents were liable for the full damages because they had failed to let the owners know about the problem with the light.

Furthermore, the judge found that the agents were not covered by the indemnity agreement because they failed to execute their obligations. They were therefore ordered to cover all damages, which amounted to $330,000.

The judge wrote that the agents, “did not investigate with the electrician the nature or cause of the problem, which was a recurrent problem rather than an isolated incident, did not bring the problem to the attention of the owners and did not appear to have responded to the tenant’s email reporting the problem.”

The judge ruled that while the building owners failed to maintain the stairwell lighting, despite a history of malfunction, they had paid the real estate agency to handle inspections and maintenance. Therefore he ruled that the onus was on the agency, not the owners, to let the owners know about the problem and arrange the repairs.

Senior policy officer with Tenants NSW, Leo Patterson Ross said repairs are among the most common reasons people call Tenants NSW for advice He said, “Tenants have a right to be safe and requests need to be taken more seriously.”

The Lesson

The court decision should act as a warning to all property managers that they should report all maintenance and repair requests to their landlords.

Mr Patterson Ross said, “Often agents are seen as having no responsibility — the contract is with the landlord. This decision shows agents do need to take responsibility for their part in this process.”

Maintenance Manager would have helped in this situation.

  • The tenant could have lodged a request to fix the light via the Maintenance Manager App.
  • This would have prompted the agents to take action by sending the request directly to the landlord for instructions.
  • The system would have sent automated follow-ups until a response from the landlord was received.
  • All actions would have been recorded and an audit trail automatically created.
  • The electrician could have also been notified via the App and all parties would have been kept in the loop in terms of what action was being taken and when.
  • The job would have remained active and front of mind for the agents until resolved.

Don’t risk being featured in the news for all the wrong reasons. Contact Maintenance Manager on 1300 155 888 for an obligation-free demonstration today.

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