Legal Update

LISTING AGENTS MAY BE LIABLE FOR INJURIES TO PERSONS VISITING THE MARKETED PROPERTY

  • May 13th, 2013
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While showing a home to her clients, a real estate agent climbed up the stairway ladder to the attic.  Unfortunately, one of the hinges broke and left the agent injured on the floor. The agent sued the owner and the listing agent.  The court ruled the owner and listing agent could be held liable for failure to notify visitors of concealed dangerous conditions in the property being marketed.  Hall v. Aurora Loan Services LLC 155 Cal.Rptr.3d 739 (2013).

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FACTS:  Aurora Loan Services, LLC, foreclosed on a home in Lafayette and then listed it for sale using Rockcliff Realty as the listing agency.  Inside the home there was a stairway ladder which allowed access to the attic by pulling the stairway down.  One of the listing agents had used the stairway ladder numerous times and nothing appeared to be wrong or damaged.

The house was inspected by a licensed contractor.  Copies of the inspection report were sent to the listing agent and a bank loan officer.  The inspection report listed more than 50 items needing repair one which was: “Stair – remove and replace attic stair.”  

After the home was listed for sale and the inspection was complete, more than 100 agents and potential buyers had been to the property.  There had been no complaints of the stairway ladder having any potential danger or defects.

Real estate agent Pinda Hall showed the home to two of her clients.  During the showing of the bonus room in the attic, the agent took her clients to where the stairway ladder was in the down position.  Both clients climbed the ladder without any difficulty and Hall was right behind them.  As she reached the point where she could look into the attic, a hinge broke, the ladder failed and she fell down.  The result of the fall left the agent with a fractured right leg and an injury to both of her knees.

Hall sued the property owner (Aurora Loan Services) and the listing agent (Rockcliff Realty) for general negligence and premises liability.  The defendants filed a motion for summary judgment and argued that they had no knowledge of any defect of the ladder.  The trial court granted summary judgment in favor of the defendants and dismissed the case.

DECISION:  The Court of Appeals reversed because sufficient evidence was presented to create a triable issue as to whether defendants knew or should have known that the stairway ladder was a concealed danger.

To impose liability for injuries suffered by an invitee due to a defective condition of the premises, the owner or occupier “must have either actual or constructive knowledge of the dangerous condition or have been able by the exercise of ordinary care to discover the condition, which if known to him, he should realize as involving an unreasonable risk to invitees on his premises. 

Real estate agents owe a duty of care to all persons, including third persons, within the area of foreseeable risk.  The extent of a real estate agent’s duty to a third person is determined by an examination of whether a reasonable person would have foreseen an unreasonable risk of harm to the third person and whether in view of such risk the agent exercised ordinary care under the circumstances.

The question on appeal was whether evidence was presented upon which a jury could conclude that Aurora and the listing agent had reason to know that the stairway ladder was potentially dangerous because it was in disrepair.  According to the inspection report (received by Rockcliff), the stairway ladder was recommended to be replaced under the heading entitled “Health and Safety Required Repairs-Group 1”. The respondents argued that the recommendation to replace the stairway ladder was “buried in a long list of suggestions for mostly ordinary or cosmetic repairs.”  

The Court of Appeals ruled that because the stairway ladder was noted in the inspection report to be replaced, the respondents breached their duty of care to notify visitors of any potential defects.

ANALYSIS:  A real estate agent has a duty to notify visitors of marketed property of concealed dangerous conditions of which the agent has actual or constructive knowledge.  When listing a property for sale, the agent knows it will be visited by interested buyers, agents and inspectors.  The listing agent has a legal duty to warn such visitors of all potentially dangerous conditions of the property that could cause injury.  Failure to do so could impose liability on the listing agent.   

Full text of the decision: http://caselaw.findlaw.com/ca-court-of-appeal/1629419.html