Balcony Collapses, Dog Bites and Other Risks

Property Manager Sued After Balcony Collapse

At the University of California Santa Barbara, the collapse of a balcony has led to many injuries – and many lawsuits.  At least six – and possibly more – students were injured as a balcony collapsed on the first floor patio and onto many students attending a party at the location.  Two of the injured parties have already filed suit against the property manager and owner of the property.  Their suits are alleging that poor maintenance, termite damage and wood rot caused the balcony to cave in.  The property manager is explaining that the party led too many people to populate the balcony, which led to its collapse.

While the facts have not been tried, this matter illustrates the fact that property managers can be brought into a lawsuit and possibly held liable for injuries that occur on the properties they manage.  Maintenance and repairs are typically part of a service agreement and it is a common practice to claim that failure to do these thing resulted in damage or injury.  It is important for property managers as well as associations to be named on a building’s liability policy.  Property Managers should also consider their own separate policies or umbrella policies to cover excess damages.

Association Board and Management Liabilities

The liability a property manager or a condo association board faces is often much bigger than one might expect.  And the things that give rise to lawsuits can be surprising and not intuitive.  Here are a few examples:

Dog Bites – Pet-friendly buildings can have higher occupancy ratios, so many condo by-laws and property managers allow them.  But an unfriendly dog can pose big problems for its owner, the board and the management company.  If a dog attacks another person, the management and board members can be brought into the lawsuit for failing to maintain fences, or failing to protect owners from a dog known to be vicious.  The board may also be sued simply because they have “deep pockets” and an insurance policy that can pay out money.  It is important to monitor pet policies and address mean animals before they become an issue.

Rental Restrictions – Often, the by-laws of a condo association contains a clause stating how many units can be rented at a particular site.  In general, limiting rentals can be of benefit to condo buyers.  It will give them assurance that the property will not become an apartment building.  It may also help with future refinancing efforts as mortgage lenders often will not make a loan unless a certain number of units are owner-occupied.  Finally, it may help with procuring insurance for the condo building  as many insurers have a minimum level of units which must be owner-occupied, as well.  The danger a condo board faces comes when trying to change the original by-laws to restrict the number of rentals.  If a board changes the rental policy and suddenly a condo owner is unable to rent their unit, the unit owner may decide to file a lawsuit against the condo association’s board.  It is best to bring a change to rental policies to a full vote of each unit owner.

Criminal Activity – Criminal activity at a condo building could place liability on the property manager.  Failure to provide good lighting, failure to repair alarm systems, or failure to respond to complaints of suspicious activity may all lead to blame being placed on the property management firm.