Can a Landlord Discharge All Responsibility to Maintain a Property to a Managing Agent?

Who bears responsibility for injuries to a tenant resulting from the condition of a property subject to a residential lease? Is it the landlord, the managing real estate agent, or both? As a real estate agent, you may be wondering whether a landlord can discharge all responsibility to maintain a property onto you.

Below, we discuss your potential liability as a managing agent and what you can do to minimise your exposure and mitigate risks.

As a managing agent of a residential property, what legal responsibilities and potential risks do I have?

As a managing agent in Australia, you hold a duty to inspect a property under management and notify the landlord of obvious defects. A landlord can delegate their duty of care to you as a managing agent, which could result in your firm, or the managing agent being held liable for injuries sustained by a tenant under a residential lease.

Yeung v Santosa Realty Co Pty Ltd [2020] VSCA 7 (6 February 2020)

The Supreme Court of Victoria documents the case  Yeung v Santosa Realty Co Pty Ltd [2020] VSCA 7 (6 February 2020), whereby the real estate agent was required to fully indemnify a landlord for proceedings made against them due to a tenant injuring herself on worn, slippery and wet stairs. This was due to the landlord delegating his duty of care to the agent.

This case is an excellent example of where, in certain circumstances, the duty of a landlord to take reasonable care and avoid the foreseeable risk of tenant injury could be discharged to a managing agent.

Reducing your risk as a managing agent 

As a managing agent, it is critical to appreciate and understand your obligations pursuant to your agreement with landlords. Staying informed about relevant laws, maintaining accurate records and ensuring effective communication between tenants and landlords is only part of reducing your risk as a managing agent. Adopting prudent risk management strategies is also vital.

Risk management strategies should include regular reviews of the scope of your property inspections, required repairs and maintenance reports and a regular review of your commercial insurance policies.

At Barrack Broking, we have a proven history of assisting real estate firms to develop personalised insurance solutions that cover:

• Professional Indemnity.
• Cyber Liability.
• Public Liability.
• Landlords Liability.
• Directors & Officers Liability.
• Office Property and Contents.

Let us help you review your existing cover or hold a meaningful conversation about how we can help you protect the future of your real estate business.

Commonly asked question: what is the difference between professional indemnity and public and property liability insurance?

We are commonly asked, ‘What is the difference between professional indemnity insurance and public and property liability insurance’? Both forms of insurance are designed to help protect businesses from different types of risk.

Professional indemnity insurance (PI)

Professional Indemnity insurance helps provide coverage to professionals or businesses that offer specialised advice or services to their clients. PI helps protect against claims made against professionals for negligence, errors, or omissions in providing professional services.

Public and Products Liability insurance (PPL)

PPL insurance refers to policies that help protect businesses from third-party claims related to property damage or bodily injury sustained on business premises or during business operations. Public and Property Liability insurance may also cover advertising-related issues.