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Written by Peter Carter

May 14, 2009

As we all know, the landlord or agent must give tenants a written condition report before the date of commencement of a residential tenancy – s 42 Residential Tenancies Act.

The purpose of such document is obvious – it allows tenants to record the existence of defects in or dilapidation to the premises, fixtures or furniture.

How does this affect the owner’s liability for a tenant’s injury?

Generally an owner is not liable for injuries arising from defects in a residence of which they are not aware, provided they carry out periodic inspections.

However, the recording of a defect in the report puts the owner (and the agent) on notice and if the owner fails to rectify the defect within a reasonable time, the owner is exposed to potential liability for the consequences.

What if the condition report is given to the tenant late or not given at all?

Delay in giving the report is an offence but also significantly increases the owner’s (and the agent’s) exposure to this type of liability.

Consider the following example:

Neither the owner nor agent is aware of any defects in the owner’s rental home. The agent secures a tenant who slips and falls down internal stairs, one week after moving in but before the agent has turned up with the condition report for her to consider, sign and return.

After being discharged from hospital 3 months later, the tenant completes the condition report with the comments “lamp in light fitting over stairs needs replacement” and “worn carpet at top of stairs” and returns it to the agent.

The seriously injured tenant makes a claim for personal injury compensation alleging that had the condition report been provided to her as required before she moved in, she would have notified these defects on the report at that time.

She asserts that the owner would have been on notice of the defects and had the owner acted reasonably, her case goes, the defects would be rectified before the fall. Thus, she says, she would not have been exposed to the risk of injury which in fact eventuated.

The owner then seeks indemnity from the agent and to make matters worse, the agent’s insurer wipes their hands of the claim because of the agent’s failure to comply with the condition report requirements of the Residential Tenancies Act.

This is a hypothetical example only. These consequences may not follow. The example does however illustrate the importance of giving condition reports as and when required. Agents should check with their insurance broker (and seek a written response) as to whether their liability cover will respond in these instances.

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