Imagine this scenario: a tenant slips down a flight of external stairs at a property owned by one of your landlords and injures themselves. The wooden stairs of the older style property are slippery, unlit and have no handrail. The tenant sues for damages. Who is liable? You may be surprised at the answer.
The outcome of the 2020 Victorian case of Yeung v Santosa Realty Co Pty Ltd & Anor [2020] VSCA 7 highlighted a critical lesson for the property management sector throughout Australia – that in the eyes of the law, the real estate agency may be forced to wear part or all the blame when a tenant suffers an injury on a property they manage. It all depends on the circumstances of the case.
Yeung v Santosa Realty & Anor- the case in brief
The tenant of a property owned by Mr Yeung complained after slipping and falling down a set of external timber stairs after dark and fracturing her ankle. The stairs of the older property were unlit, worn, slippery and had no handrail. She subsequently injured her shoulder due to having to use crutches to support her ankle injury. She sued both the landlord (Mr Yeung) and the agency managing the property (Santosa).
The outcome
The Court found both Mr Yeung (landlord) and Santosa (the property managers) liable for damages, with two thirds of the liability allocated to the landlord.
The landlord appealed against the decision, and he won. Santosa Realty was subsequently found to be 100% liable and ordered to pay damages to the tenant.
Why was the agency determined as being fully liable?
After assessing the contract, the court found that the landlord had fully delegated his duty to assess the property and be on the lookout for potential hazards and defects to the agency as his property managers. Therefore, in the eyes of the law, the agency was responsible for identifying safety hazards and ensuring they were addressed. In other words, the property managers should have identified that the external stairs posed a slip hazard and ensured the problem was fixed.
The court said:
“We consider that the judge was wrong to treat Yeung as best placed to identify defects in the premises. It was Santosa who had the responsibility to inspect the premises and to prepare condition reports on the premises and regular inspection reports.”
This case is a reminder of the importance of:
- Fulfilling your obligations as a property manager in accordance with the Lease Agreement, and
- Being on the lookout for any hazards and defects that could pose a risk to the tenant’s safety and have the issue addressed.
There is an easier and far more effective and responsible way to mitigate risk – leave it to the experts. By offering every landlord a PropertySafe inspection and documenting that you have done that, the ball is in the landlord’s court to say yes or no. If they agree to the report, they will be provided with a detailed report that highlights the level of risk in their property, enabling them to take action to mitigate those risks.
As property managers, you are not builders or safety inspectors. So how can you be expected to know what is a safety hazard unless it is obvious? PropertySafe leaves safety to the experts, keeps tenants safe and adds additional protection to the agency and the landlord against legal action should anything happen. Had Santosa suggested that Mr Yeung invest in a PropertySafe report, and he refused, the outcome could have been different.
To learn more about the benefits of a PropertySafe inspection, including how it protects your agency, call 1300 350 000.
