Daily Development for Thursday, January 6, 1999

By: Patrick A. Randolph, Jr.
Professor of Law
UMKC School of Law
Of Counsel: Blackwell Sanders Peper Martin
Kansas City, Missouri
randolphp@umkc.edu

Thanks to Betsy Bowman for this one.

LANDLORD/TENANT; LANDLORD'S LIABILITY FOR INJURY TO TENANTS; SHORT TERM RENTALS: North Carolina holds that there is no common law duty on the party of landlords of short term vacation rentals to provide a safe premises.

Conley v. Emerald Island Realty, 513 S.E.2d 556 (N. Car. 1999)

Defendants Ingram were owners of a vacation house on the North Carolina coast. They rented it on a weekly basis through a property management company, defendant Emerald. The Conley family rented the property through Emerald for a two week family vacation. The allegations were that Emerald annually looked over the property, made necessary repairs, and accounted for them to the owners.

The Conley family gathered after dinner on the second floor deck of the vacation house for a family picture. That deck collapsed onto the first floor deck, which also collapsed, leading to personal injuries to members of the family. They sued Ingram and Emerald. The trial court granted summary judgment for the defendants, as there was no allegation that there had been any representation of quality of the premises and no allegation that the defendants were aware of a latent defect in the premises.

The Court of Appeals of North Carolina reversed, following established common law principles in a number of other jurisdictions imposing an implied warranty of suitability upon landlords of short term vacation rental property.

The Supreme Court of North Carolina, however, reversed the Court of Appeals, and reinstated the summary judgment order. The court noted that the North Carolina legislature had adopted an extensive landlord/tenant statute, imposing responsibility on residential landlords to provide a habitable premises, but this statute applies only to premises rented "as a primary residence." The court concluded that it would be inappropriate, under the circumstances, to fabricate an extension of responsibility for landlords beyond that developed by the legislature. It noted that, prior to the statute, the North Carolina law had been the traditional law of landlord liability caveat lessee:

This Court has never adopted an implied warranty of suitability doctrine as an exception to our traditional landlordtenant law, and we decline to do so now. Therefore, because the Act does not control in this case and because defendants Ingram owe no duty to plaintiffs under North Carolina's common law, summary judgment for the defendants Ingram was appropriate. Also, since North Carolina does not recognize the implied warranty of suitability and since the defendants Ingram did not owe a duty to the plaintiffs, we conclude that defendant Emerald Isle Realty is also free from liability.

A concurring judge made even clearer that the court's judgment was simply that the North Carolina legislature had "taken control" of the issue:

While this Court can certainly change the common law, we have been reluctant to do so when the General Assembly has enacted pervasive legislation essentially preempting the field. Because our General Assembly has legislated so pervasively in the area of landlordtenant relations, I join the majority in declining to make what I consider to be a badly needed change in this area of landlordtenant liability. This area of the law is ripe for legislative action.

Comment 1: When the North Carolina legislature elected to exclude from its implied warranty statute residential rentals that were not "primary residences," it clearly made a political choice in this state, which has a very substantial vacation rental industry. It is difficult to fault the North Carolina court for respecting this choice.

Comment 2: Politics aside, these circumstances would appear to cry out for some measure of legal responsibility on the part of both the rental agency and the owners to insure that the premises are free from defects that could lead to significant personal injury. The customer of a short term rental property is not in a position to make the investment to inspect the property for safety hazards. The owners and managers of the property are, and in this case it appears that the managers actually had undertaken a duty to inspect and maintain the property regularly. It is no leap of logic to conclude that if the managers fail to identify and repair dangerous conditions, then they and their principles ought to bear financial responsibility for the consequences.

Comment 3: It should be noted that this issue is distinct from the question of whether there is an implied contractual warranty that the premises are suitable for vacation purposes. The fact that there is an implied duty of care to prevent injury doesn't mean that the landlord necessarily has the duty to insure that all the closets close and that the roof doesn't leak. The editor, candidly, believes that residential landlords, particularly those renting for the short term, should have such implied responsibilities, but a court wouldn't have to go that far to impose liability in a case like the one at issue.

Readers are urged to respond, comment, and argue with the daily development or the editor's comments about it.

Items in the Daily Development section generally are extracted from the Quarterly Report on Developments in Real Estate Law, published by the ABA Section on Real Property, Probate & Trust Law. Subscriptions to the Quarterly Report are available to Section members only. The cost is nominal. For the last six years, these Reports have been collated, updated, indexed and bound into an Annual Survey of Developments in Real Estate Law, volumes 1‑6, published by the ABA Press. The Annual Survey volumes are available for sale to the public. For the Report or the Survey, contact Maria Tabor at the ABA. (312) 988 5590 or mtabor@staff.abanet.org

Items reported here and in the ABA publications are for general information purposes only and should not be relied upon in the course of representation or in the forming of decisions in legal matters. The same is true of all commentary provided by contributors to the DIRT list. Accuracy of data and opinions expressed are the sole responsibility of the DIRT editor and are in no sense the publication of the ABA.

Parties posting messages to DIRT are posting to a source that is readily accessible by members of the general public, and should take that fact into account in evaluating confidentiality issues.

ABOUT DIRT:

DIRT is an Internet discussion group for serious real estate professionals. Message volume varies, but commonly runs 5 ‑ 10 messages per workday.

Daily Developments are posted every workday.

To subscribe to Dirt, send an e-mail to:

To:	ListServ@listserv.umkc.edu
Subject:	[Does not matter]
Text in body of message	Subscribe Dirt [your name]

To cancel your subscription to Dirt, send an e-mail to:

To:	ListServ@listserv.umkc.edu
Subject:	[Does not matter]
Text in body of message	Signoff Dirt

For information on other commands, send the message Help to the listserv address.

DIRT has an alternate, more extensive coverage that includes not only commercial and general real estate matters but also focuses specifically upon residential real estate matters. Because real estate brokers generally find this service more valuable, it is named “Brokerdirt.” But residential specialist attorneys, title insurers, lenders and others interested in the residential market will want to subscribe to this alternative list. If you subscribe to Brokerdirt, it is not necessary also to subscribe to DIRT, as Brokerdirt carries all DIRT traffic in addition to the residential discussions.

To subscribe to Brokerdirt, send an e-mail to:

To:	ListServ@listserv.umkc.edu
Subject:	[Does not matter]
Text in body of message	Subscribe Brokerdirt [your name]

To cancel your subscription to Brokerdirt, send an e-mail to:

To:	ListServ@listserv.umkc.edu
Subject:	[Does not matter]
Text in body of message	Signoff Brokerdirt

DIRT is a service of the American Bar Association Section on Real Property, Probate & Trust Law and the University of Missouri, Kansas City, School of Law. Daily Developments are copyrighted by Patrick A. Randolph, Jr., Professor of Law, UMKC School of Law, but Professor Randolph grants permission for copying or distribution of Daily Developments for educational purposes, including professional continuing education, provided that no charge is imposed for such distribution and that appropriate credit is given to Professor Randolph, DIRT, and its sponsors.

DIRT has a WebPage at: http://www.umkc.edu/dirt/