property management, ESM Compliance

Essential Safety Measure Compliance and the Property Manager’s Duty of Care

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The significance of the duties that property managers perform for their clients, both residential and non-residential, property owners and occupiers, have come under the microscope much more in recent years as regulations have multiplied in number and extent.

A couple of cases in NSW and Vic can illustrate this, with similar decisions likely to happen in other states:

In Yeung v Santosa Realty Co. Pty Ltd (2020), a residential tenant slipped on some stairs and broke her ankle. The stairs were worn, slippery and unlit and the tenant plaintiff brought proceedings for negligence against the owner (Yeung) and the agent, Santosa. At the original trial, the judge found that both defendants had breached their duty of care and were liable to pay damages of $433,899.80 (two-thirds to the owner and one-third to the agent).

The owner appealed, asserting that it was the failure of the agent’s property manager to inspect the stairs, assess the defects and report back to him, that led to the plaintiff’s injuries. He also claimed that he had delegated the performance of his duty of care to the agent and therefore he should be indemnified with respect to his liability to the plaintiff. Ultimately, the Court of Appeal agreed and the agency was liable for the entire amount of the damages.

The second case is Than v Galletta & Ors (2019), an amazingly similar case to the previous one, except in this one the tenant’s foot was broken, and the only issue was with the lighting above the steps. The tenant sued the owner and the agent.

There was a history of the lighting over the steps not working and the managing agent had been advised on at least two occasions previously – the last one was only 23 days prior to the incident.
Two very important findings arose in this case: Although the agent and their electrician gave evidence that the report 23 days earlier had been actioned, the court was not persuaded as there was no corroborating evidence, including no documentation from the electrician, and that the owner had not been notified. In relation to an indemnity clause, whereby an agent might seek indemnity from an owner should any liability arise, the Court relied on a prior decision in holding that the agent’s negligent conduct constituted a failure to perform its duties, thereby rendering the indemnity clause inapplicable. As a result, the agent was liable for damages of $75,000.

What these cases emphasise is that an agency’s liability for an incident at a managed property is determined not only by whether the agent had acted in accordance with its duty of care, but also whether the agent can demonstrate that from its records. Accordingly, it was not good enough for the agent and the electrician to attest to the job being underway (which, possibly, may not have been the case); the problem was no supporting evidence from the records.
Using FMClarity’s platform can put your mind at rest with these kinds of incidents as the contractors are automatically requested by the system to upload service reports to the work order, providing crucial evidence of work completed without you needing to chase it up.

In addition, using our Preventative Maintenance module, all areas of Essential Safety Measures requiring regular inspection are automatically issued to contractors at user-defined intervals.

  • If an inspection event is imminent, that event is shown in your portfolio as due (orange).
  • If the event is missed it is shown in your portfolio as non-compliant (red) and appropriate messages are generated.
  • Once the inspection has been completed, the system will show the portfolio as compliant again (green).

In the legal cases above, this evidence could be easily presented to demonstrate that the managing agent was acting in accordance with the duty to the landlord. The traffic-light system allows you to scan your portfolio at a glance and quickly identify any areas at risk of non-compliance.

Also, all events in the lifecycle of a work order are recorded, from the initial report of the fault (in this case, the light found to be faulty), to the completion of the job and the associated service report and invoice received from the supplier. All the history of each job is easy to access via our cloud-based web or mobile apps and is ready to go in case of requested evidence. Reports can also be generated promptly attesting to the lifecycle of the fault and the dates of associated events.

For more details please request your demo today at fmclarity.com or call us on 1300 111 FMC.

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