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Georgia Court Clarifies Landlord Liability for Construction Defects

This post was written by AHC attorney Chadd Reynolds.

In Cowart v. Schevitz, the Georgia Court of Appeals clarified the instances in which an out-of-possession landlord can be liable in a premises liability claim. No. A15A2036, 2016 WL 563114, at *4 (Ga. Ct. App. Feb. 15, 2016).

In this case, the plaintiff was leaving a restaurant and injured herself stepping down off of a sidewalk near the bottom of a ramp.  The plaintiff filed a premises liability claim against the owner of commercial property (the “landlord”) and the operator of the restaurant (who later settled), seeking medical expenses and costs of litigation.  An expert testifying on behalf of the plaintiff stated that the ramp was required to have railings pursuant to building codes and, had the railings been installed on the ramp, the plaintiff’s fall more than likely would not have occurred.  The landlord moved for summary judgment, arguing that as an out-of-possession landlord, his liability to third persons for the use of the property by his tenant was precluded under O.C.G.A. § 44-7-14.  The trial court denied the motion without comment, and the owner subsequently appealed.

The landlord leased the property to the operator of the restaurant.  Under the lease agreement, the lessee would maintain the physical condition of the property and perform all maintenance, while the lessor was to approve any additional physical changes and had the right to inspect the property at any time.

The plaintiff argued that since the owner was required to approve any changes, it maintained possession of the property and was liable for her injuries.  The Court disagreed, noting that landlords will be deemed out-of-possession even when they retain limited entry or inspection rights for landlord-related purposes.  However, if the landlord does, in fact, inspect the property, it must repair any unsafe conditions which discovered or should have been discovered by the inspection.  Although the landlord could inspect the property at any time, according to the terms of the lease, Court held that he was an out-of-possession landlord.

Under O.C.G.A. § 44-7-14, an out-of-possession landlord is liable for damages to third parties if the damages arise from defective construction or the failure to keep the premises in repair.  The Court stated that, generally, such liability exists only when the structure is built by the landlord or under its supervision or direction.  An exception exists, however, when the premises is defectively constructed by a predecessor in title and the landlord knew or “by the exercise of reasonable diligence could have known of its improper construction before the tenancy was created . . . if the person sustaining the injuries could not have avoided the same by exercising ordinary care.”

In this case, the ramp was built by a prior lessee who did not obtain approval from the landlord.  In this case, the landlord can be held liable only for the defects that would have been discovered during a pre-purchase building inspection.  The Court stated, an “out of possession landlord is not liable for all defects because ordinary care in the fulfillment of the landlord’s duty to keep the premises in repair does not embrace an affirmative duty to make such an inspection of the premises as will disclose the existence of any and all latent defects.”  As a result, the Court held that the landlord was not liable under O.C.G.A. § 44-7-14 because he did not construct the ramp, and it was not constructed under his supervision or direction.

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