You might not know it, but landlords now owe a greater duty of care to their tenants and third parties on their property after a landmark NSW court decision last year. We tell you what this means for you, as well as what property investors can do to protect themselves from liability.
Owners have a duty of care to the tenant
A recent NSW court decision makes it clear that all owners throughout Australia have a ‘duty of care’ to tenants to provide a safe and habitable property, after more than $840,000 was awarded to a tenant injured by broken glass.
The ruling has made clear exactly what ‘duty of care’ an owner and their agent owes a tenant, their awareness about potential problem areas in rental properties, and the importance of complying with building codes when conducting even routine maintenance.
The Australian government defines duty of care as “an obligation to take reasonable care to avoid foreseeable harm to another person on their property.”
Inner west example
In this case, a tenant of a rental property in Ashfield was seriously injured after his hand struck and shattered the large glass panel that formed part of the front door. The tenant sued the owner of the property, the Roads and Traffic Authority, and the managing rental agent, alleging negligence because, contrary to building codes, the door had not been fitted with safety glass contrary to building codes.
The court found in favour of the tenant, awarding him $843,146 in damages plus costs, with liability for paying the total bill being split into a 25 per cent share for the owner and 75% share for the managing agent.
The judge found that the owner and managing agent were responsible for the tenant’s injuries because they failed to install safety glass when conducting repairs on the premises.
Watch out for changing codes
While the use of safety glass was not mandatory at the time the rental premises were built, the judge found that the owner and managing agent were responsible for the tenant’s injuries because they failed to install safety glass when conducting repairs on the premises after it became mandatory.
In March 2005 – one month before the injury was sustained by the tenant – a glass panel in the door to the bedroom was broken during a failed burglary attempt. The judge found that no measures were taken to install safety glass in the property.
So in practical terms, this ruling means that owners and managing agents will have to closely examine the present condition of their properties and review maintenance records to ensure that even work don’t in the past meets building codes.
It’s worth noting that the court rejected arguments that the tenant ‘accepted’ the premises as it was at the time the tenancy agreement was signed. The judge said that the owner must still take treasonable care ‘in respect of dangers not readily apparent on inspection.’
What you can do
As property owners it is important that you have the property inspected annually by professionals to ensure that the property is safe and fit for the tenant to live in. This should include:
- A building/glazier inspection
- An electrical inspection
- A pest inspection
- A pool inspection
If repairs are required, prompt action must be taken by engaging qualified and insured tradespeople appropriate for the works to protect you and your investment. Luckily, if we’re managing your property for you, you don’t need to worry.
“At Exchange Property we use a team of hand-picked, tried and trusted, fully licensed tradespeople to handle any maintenance that needs to be done at your property,’ says Exchange licensee Ian Comyns.
“Annual inspections and binding all tenants on the lease to a condition report also help us monitor your property and look after your investment.”
For property investors, the Hunt v Roads and Traffic Authority of NSW ruling raises a whole host of issues that could change the way they have to operate.
The decision is currently being appealed. We’ll keep you updated on its progress.
Don’t want your property investment to turn into a nightmare? Download a copy of our FREE Property Investor Handbook from the Exchange Property Sales and Management website and find out how we will manage your property for you.