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As a San Diego landlord, certain liabilities need prevention. This post covers the most important San Diego landlord liabilities and how to prevent them.

You will learn about the many liabilities stemming from injuries to perils. Also, how to protect yourself from lawsuit judgments.

 

8 Types of San Diego Landlord Liabilities

According to N.Y. Times, the U.S. experiences more lawsuits than any other country. Therefore, landlords need protection from many liabilities they face. Let’s explore the important ones.

 

1. Premises Injuries

Landlords often get sued for injuries occurring on their rented premises. A plaintiff needs to prove the landlord (or his/her agent) maintained the property negligently which caused the injury. Types of property negligence include:

  • Faulty wiring leading to electrocution or a fire injuring inhabitants and guests;
  • Decaying stairs or a balcony causing physical injuries;
  • Slip and falls caused by leaking plumbing or bulging floors;
  • The roof caves in because of poor workmanship or materials;
  • A backyard fence breaks due to lack of maintenance allowing a wild animal to bite occupants; and
  • More injuries occur inside or on the rented property grounds due to the landlord’s negligence.

 

2. Dangerous Conditions

Many landlords get sued for allowing dangerous conditions on the premises.

The injured person must prove that the landlord (or his/her agents or employees) knew about the existence of a dangerous condition and failed to fix it. Such as:

  • A toilet backs up and the tenant informs the landlord who fails to fix it before a guest slips and falls on the wet floor;
  • A landlord’s employee receives notice from a tenant that a stairway banister is unstable. The employee fails to repair it before a visitor falls and suffers severe injuries;
  • An outdoor light burns out. The landlord’s agent takes too long to replace the bulb. Meanwhile, a tenant gets mugged in the dark entryway; and
  • The tenant informs the landlord about a front yard tree rotting. The landlord takes too long looking for the cheapest landscaping company. Then, the tree falls into the rented home causing major injuries to occupants.

 

Likewise, if the landlord knew of a dangerous condition and failed to post warning signs about it. That would also make the landlord liable for resulting injuries. Moreover, you must look at potentially dangerous conditions and post warning signs.

 

3. Tenant’s Security

Failing to protect your tenants’ security leads to personal injury lawsuits. A duty to protect the tenants and visitors in the common areas falls upon the landlord.

Common areas include:

  • An apartment building’s entrance;
  • Lobby;
  • Elevators;
  • Stairways;
  • Hallways;
  • Social areas;
  • Pool; and
  • Parking areas.

 

Not keeping these areas in safe conditions makes landlords liable for injuries.

In addition, protecting tenants and visitors from criminals. Common areas must be “reasonably safe” from criminals. Outdoor lighting to prevent dark areas in the parking lot or adjoining alleyways. Installing surveillance cameras and hiring security personnel makes the common areas safer.

 

4. Animals

Landlords often get sued for allowing wild animals or vicious dogs in their rentals. The legal “knew or should have known” doctrine claims the landlord “should have known” the animal was potentially dangerous.

Some tenants keep exotic pets like large snakes, predatory birds, jungle animals, alligators, and other wild animals as pets. Knowing of these pets makes landlords liable if an occupant or guest gets injured by them.

The California Dog Bite law holds dog owners strictly liable when their dogs bite other people. But, according to the Apartment Owners Association of California, landlords are only held liable for tenants’ dog bites when“the landlord knows of the pet’s dangerous propensities and has the ability to control or prevent the harm”.

So, if your tenant keeps dangerous animals as pets and you didn’t know about it, you’re safe.

 

5. Tenants Behaving Badly

Potential liability exists from bad behavior by tenants. Knowing about obnoxious, unlawful, or bad behavior by tenants creating a nuisance.

Not evicting a tenant committing criminal acts or harming others makes the landlord liable. Knowing about a tenant’s unreasonable conduct and failing to stop it creates liability.   

California leases imply a tenant’s right of “quiet enjoyment”. (California Civil Code §1927). ”The California landlord may be held accountable if after being notified of the disturbance they take no action against the offending tenant.”

Want to take legal action against a tenant behaving badly?

Read our post about “How to Evict a Problem Tenant in California”.

 

6. Vehicle Liability

Vehicles used in the landlord’s business (including employees and agents) cause at-fault collisions and injuries.

California only requires minimum auto insurance of $30,000 per accident for bodily injury.

But, what if a landlord gets sued for $1 million for a death caused by an employee driving the company vehicle? The insurance company pays the $30,000 and the landlord gets sued for the rest.

Tip: Keep reading to see how to protect yourself from large court judgments.

 

7. Other Perils

Most insurance policies for landlords (and home insurance) cover damages for rain, fire, hail, and wind storms. But floods and earthquake insurance are not required by landlords.

California landlords must disclose to their tenants if the property sits in a flood hazard zone. Also, should recommend that tenants purchase renter’s insurance to cover losses caused by floods, fire, and other perils.

Read about California Flood Zones in our postHow to determine if a California Property is in a Flood Zone”.

 

8. Other Types of Liabilities

San Diego landlords also face lawsuits over non-personal injuries.

Many landlords get sued for:

 

Invasion of Privacy

Entering rentals without first getting the renter’s permission. Landlords often check the condition of the premises when the tenants are out working or vacationing. With good intentions to protect the property and make necessary maintenance and repairs, but illegal.

Also, California laws make it illegal for landlords to harass tenants. Harassment of tenants includes inducing tenants to vacate a unit by using “menacing conduct, willful threats, or force”. Penalties exist up to $2 million for each harassment by a landlord.

Read our blog post “Landlord Right of Entry in California” about laws protecting a tenant’s privacy.

 

Discrimination

California laws prohibit landlords from discriminating against potential and existing tenants. The list is long about the types of illegal discrimination.

So, we recommend reading our blog post “California Fair Housing Laws in 2020”.

 

Defamation

Defamation means a false statement someone makes about another person. It’s published or told to another person. It either harms someone personally or his/her professional reputation. The injured person sues for damages, including emotional distress and financial loss.

Libel means written defamation like emails, letters, and printed or broadcasted statements.

Slander means oral defamation (audible but not written) to third parties. Doesn’t include face to face with no witnesses.

Further, beware of disclosing sex offenders as that may lead to liability.

Read our “How to Comply with the California Sex Offender Disclosure Law” to learn more.

 

How to Limit San Diego Landlord Liability

Here are some ways for a San Diego landlord to limit liabilities.

 

Inspect the Premises

Minimize potential hazards leading to lawsuits for negligence by inspecting the premises. Landlords and their agents need to make periodic inspections with permission from their tenants.

Ask your tenants to report security problems or dangerous conditions. And provide prompt repairs.

 

Renter’s Insurance

Tip: Smart landlords require their tenants to take out renter’s insurance to cover their personal belongings.

For example, if a fire or water damages tenants’ personal property, their renter’s insurance should provide coverage. Therefore, it lessens the number of claims made against your landlord’s insurance coverage.

 

Extra Landlord Insurance

The problem with basic insurance policies they are just that, basic.  

Now that you know about liabilities, consider adding coverage your insurer provides. Like coverage for:

  • Discrimination;
  • Defamation;
  • Invasion of privacy; and
  • Higher vehicle coverage for your agents and employees.

 

How Much Landlord Insurance Do You Need?

Every landlord liability insurance contains limits. Maximum liability coverage may not be enough. So, how much landlord insurance do you need?

Several factors to consider before deciding on coverage you need:

  • Your net worth;
  • The value of your rental properties;
  • Mortgaged property;
  • Rental properties ownership; and
  • The existing coverage.

 

Net Worth

Your net worth determines your exposure to lawsuits. Most personal injury lawsuits pay the plaintiff’s attorney on a contingency basis. That means the lawyer only gets paid if the plaintiff wins and collects from the judgment.

Tip: Paupers never get sued by contingency based lawyers. That’s because they won’t get paid.

Your net worth exposure to a court’s judgment often determines the amount you get sued for. Millionaires get sued for millions of dollars. Even if the injuries don’t justify a million dollars.

An entire legal industry exists around “Asset Protection”. Using legal entities like Trusts, Private Foundations, Corporations, and LLCs to own property. In short, the real owner appears poor which liability lawyers hate.

For instance, a fire destroys an apartment building owned by an LLC. Only the LLC gets sued, not the landlord (unless he or she’s personal negligence caused the fire). The plaintiff can’t sue the other rental properties owned by separate LLCs.

Learn about LLCs in our post, “How to use an LLC for every property purchase”.

 

Value of Your Rental Properties

The structures on your rental properties need insurance coverage for their full value. Anything less comes out of your pocket if the structure becomes destroyed.

 

Mortgaged Property

Your mortgage company requires minimum structural property insurance coverage. It protects the lender from the future destruction of the structures.

 

Rental Properties Ownership

Do you own all your rental properties in your name?

Or, do you own separate rentals in corporations, trusts, private foundations, or LLCs?

 

Existing Coverage

Ask yourself:

  • Does your existing landlord insurance cover enough?
  • Does it cover your total liability exposure?
  • Or, cover the current value of your structures?
  • Or, include the different types of landlord liabilities?

If not, you need extra coverage.

 

Umbrella Coverage

If your high net worth and inadequate coverage demand more protection, consider an umbrella policy that provides extra coverage.

According to the Insurance Information Institute, the first $1 million of an umbrella policy costs $150 to $300 annually. An extra $1 million costs from $60 and $75.

 

Conclusion

 

Prevent San Diego landlord liabilities.

Make sure your landlord insurance provides you with all the coverages. Want to learn about all types of landlord insurance?

Learn about the different landlord policies in our post“Insurance Policies for Landlords”.

And, consider adding insurance coverage for:

  • Discrimination;
  • Defamation;
  • Higher vehicle coverage for your agents and employees; and
  • Invasion of privacy.

 

Protect yourself from lawsuit judgments by:

  • Selecting safer ways to own rental properties;
  • Don’t own rentals in your name;
  • Separate each property with legal entities;
  • Make your renters purchase rental insurance for their belongings; and
  • Include the right to inspect the rentals to make sure everything works and no defects exist.

 

Moreover, hire an experienced San Diego property management company to protect your interests.

Contact us for all your property management needs in the greater San Diego area.

 

Steven Rich, MBA – Guest Blogger

 

Disclaimer

This article conveys information and does not provide legal advice. You should not consider any information in this article to be legal advice. Readers should consider obtaining specific legal advice from an attorney concerning any decision or course of action contemplated.

 

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