Where Real Estate Investors & Landlords Go for Success

    Landlord Liability for Criminal Acts and Activities

    Landlords have some degree of legal responsibility to protect their tenants from the criminal acts taking place on their rental property. In fact, rental property owners are sued frequently by tenants injured by criminals. Typical settlements and jury awards in these cases range from $100,000 to $1 million.

    In addition to being liable for the crimes inflicted on tenants, a landlord also has a duty to protect tenants and the rental property’s surrounding neighborhood from the criminal acts of other tenants. Landlords are especially susceptible for liability related to tenants dealing drugs on the property. These legal duties stem from local ordinances, statutes, building codes, and court decisions.

    This article discusses strategies that rental property owners can implement to protect their tenants and reduce liability from various types of crimes.

    Protecting Tenants from Strangers

    In order to limit the likelihood of (and reduce responsibility for) crime committed by strangers on the rental property, a landlord should be sure to:

    • Meet all state and local security laws that apply to the rental property. Examples of these requirements include installing deadbolt locks on doors, individual locks on window, and good lighting in common areas. Some landlords go out of their way to exceed the standards required by law. Such protections not only bolster the property’s safety and security, they also make the property more attractive to prospective tenants. (The Grand Rapids property maintenance code requires the installation of dead bolt locks, window pins, and either a peep hole for doors or a window very near the door with a complete view of the area in front of the door.)
    • Realistically assess the crime situation on the rental property and around its surrounding neighborhood. Educate tenants about crime problems in the neighborhood, and describe the security measures that are in place, as well as their limitations.
    • Design a security system that provides reasonable protection for the tenants. Input from local law enforcement and private security professionals may prove helpful in this endeavor. Also, the landlord’s insurance company may be willing to provide useful advice on security measures.
    • Maintain the rental property. Conduct regular inspections of common areas. Efficiently spot and fix any security problems, such as broken locks or burned out exterior flood lights.
    • Protect against repeat crime. If a crime occurs on the property or near it, a landlord must take measures to ensure that it doesn’t happen again. Landlords face heightened liability when a crime occurs on their property where a similar assault or other crime occurred in the past. Once the first crime has been committed, the law considers the landlord to be on notice.
    • Keep the communication lines open with tenants. It’s a good idea to ask renters for their suggestions as part of an ongoing safety, repair, and maintenance system.
    • Swiftly handle tenant complaints about dangerous situations and/or suspicious activities. Repair any broken security items immediately. Failing to fix items after receiving notice about it may saddle the rental property owner with a higher level of legal liability should a tenant be injured by a criminal act after a relevant complaint is made. Again, the law considers the landlord to have been put on notice with the compliant.

     
    Considering Safety Costs

    Providing additional security measures can be expensive. Sometimes, a rent hike may be necessary to offset costs. Tenants aren’t always opposed to this idea. In fact, it could benefit the landlord to discuss the situation with current tenants. Many will pay more for a safer place to live—and thus may view a rent hike as palatable and reasonable if it contributes to providing a safer home.

    Also, it’s important to view crime-prevention measures as an investment. Safety improvements may very well save money in the long run (while maintaining tenants’ well-being). While some safety measures are costly, the money spent today may pale in comparison to the costs resulting from crime on an unprotected premise. Settlements paid by rental property owners’ insurance companies for violent crimes such as rape and assault are usually in the range of hundreds of thousands of dollars—and jury awards are often higher.

    Illicit Drug Commerce and Landlord Liability 

    Rental property owners may find themselves in a perilous situation when tenants are caught dealing drugs on their property. This is no joke; tenants who deal drugs can saddle landlords with a variety of practical and legal problems.

    Any person (whether they are a tenant or not) who is injured, robbed, or even annoyed by drug dealers—may sue the landlord on the grounds that the rental property has degenerated into a public nuisance that seriously threatens public safety and/or morals.

    Local, state, or federal authorities have the power to levy stiff fines against the rental property owner for allowing illegal activity to continue. In fact, law enforcement authorities may seek criminal penalties against the landlord for knowingly allowing drug dealing on the rental property.

    In extreme cases, the presence of drug dealers and/or drug activity may result in the government confiscating the rental property. In 2014, the Michigan Legislature enacted a new “Padlock Law” that allows municipalities to ask a judge to declare a home a “public nuisance” and thus order it vacated and sealed for up to a year after it’s raided twice for drug dealing.

    Preventing Drug Infestation

    In many ways, a drug dealing environment is a landlord’s worst nightmare. It’s a situation that goes hand-in-hand with poor tenant behavior. The environment also makes it very difficult for the landlord to find and keep good tenants amidst all the unsavory activity. As a result, the value of the rental property will plummet.

    How can a property owner avoid facing liability that stems from tenants who deal drugs—or who otherwise break the law?

    Landlords can protect themselves and their law-abiding tenants by taking practical steps to avoid trouble caused by criminal tenants. These steps also serve to limit landlord liability in any lawsuits that come forward:

    • Screen tenants carefully in order to choose tenants who are likely to be peaceful, law-abiding citizens. Weed out violent or dangerous individuals to the extent allowable under privacy and anti-discrimination laws. Be aware that the law may limit questions about a tenant’s past criminal activity, drug use, or mental illness. For more information, please see RPOA’s related article Suggestions Regarding Criminals & Tenant Screening.
    • Do not accept cash payments for rent.
    • Adopt a zero-tolerance policy. Make it clear that tenants’ disruptive behavior will not be tolerated by including an explicit provision in the lease or rental agreement prohibiting drug dealing and other illegal activity. Promptly evict tenants who violate the clause.
    • Stay apprised of suspicious activity, such as heavy traffic in and out of the rental premises.
    • Promptly respond to tenant and neighbor complaints about suspicious activity related to drug dealing on the rental property. Get advice from local law enforcement immediately upon learning of a problem.
    • Keep meticulous records that provide detailed evidence of crime-prevention efforts.
    • Consult with security experts.

     
    In short, the rental property owner should do everything reasonable to discover and prevent illegal activity on the rental property.

    Follow a Diligent Hiring Process

    Rental property owners should be particularly careful when hiring employees. Property managers and maintenance people interact with tenants and have access to master keys. Landlords should scrupulously check these employees’ backgrounds to the fullest extent allowed by law. Once the hiring process is completed, closely supervise the employee’s job performance. A tenant who gets hurt, has an invasion of privacy issue, or has property stolen or damaged by an employee could sue the property owner for failing to screen or supervise the employee properly. If tenants complain about illegal acts by rental property employees, the landlord should pay attention. As a final precaution, property owners should make sure their insurance covers illegal acts of their employees.

     

    Disclosure: This Knowledge Base article is accurate as of the last update. Laws and policies are subject to change. If you have any questions, please call the office. Click here for contact information.