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Rita Yousef: The buck stopped with the agent

It's an age-old question. Who's at fault if a defect at an investment property leads to the tenant injuring themselves. Is the landlord or the agent in the wrong? Personal injury lawyer Rita Yousef examines a big Victorian case that shows agents must meet the obligations set in contracts with their landlords.

In Victoria, similar principles apply in general to other parts of Australia when it comes to the duties of care owed by landlords, tenants and agents. 

Real estate agents, landlords and tenants must all take reasonable precautions to address foreseeable risks of harm arising from defects on residential properties.

Even though varying degrees of culpability may be applied to each of these parties, they are all generally required to not only be aware of the state of the properties that they manage, own or occupy, but also to take active steps to address any hazards or defects that could lead to injuries.  

The case of Yeung v Santosa Realty Co Pty Ltd & Anor [2020] VSCA 7, which was determined by the Victorian Court of Appeal, highlights that the particular circumstances of each case are crucial to determining who is liable when there is an injury on a residential property. 

In this case, the tenant fractured her ankle when she slipped and fell on stairs that were worn, slippery, unlit and had no handrail.

The accident occurred at night. As a result of having to use crutches following her accident, the tenant subsequently suffered a tear in her right shoulder.

She sought compensation for her expenses and losses arising from the injuries caused by the accident.

She sued the landlord (Yeung) and the real estate agent (Santosa). 

Initially, both Yeung and Santosa were found to be liable, with two thirds of the liability being allocated to the landlord.

Yeung appealed to the Victorian Court of Appeal and he won. 

The court looked at the terms of the agreement between the landlord and the agent in relation to the nature of the duties delegated to the agent.

The court found that the landlord had fully delegated his duty to conduct inspections, to be on the lookout for hazards and defects, as well as to address them.

As a result of the nature of the agreement between the landlord and the agent, the agent was required to identify obvious risks of injury and to ensure they were fixed. 

In this case, the state of the stairs was so dangerous that the court found it would have been obvious to any person (not requiring expert knowledge) that the stairs needed to be fixed in order to prevent injury.

The agent should have identified the risk and addressed it. 

This is different from a situation where a landlord only partially delegates their duties to a real estate agent and therefore does not give the agent full authority to manage repairs, as well as to address defects.

In that situation, the landlord would be required to do such things as the below, for example:

  • Provide sufficient instructions regarding repairs.
  • Respond adequately to the need for repairs and address risks.
  • Be actively involved in the process of identifying risks/defects, and addressing them.

In this case, the court stated:

“We consider that the judge was wrong to find that Yeung failed to take any real steps to ensure the premises were in good repair.

“There is no reason to reject the proposition that it was reasonable for Yeung to appoint Santosa as a management agent for the purposes of conducting inspections that required no specialist expertise…”

And further, the court said:

“We consider that the judge was wrong to treat Yeung as best placed to identify defects in the premises.

“It was Santosa who had the responsibility to inspect the premises and to prepare condition reports on the premises and regular inspection reports.”

This case serves as a reminder to real estate agents that they must fulfil their obligations in accordance with the agreements they have in place with landlords.

In addition, it is generally advisable to be on the lookout during routine inspections for hazards and defects that could lead to injuries. 

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Rita Yousef

Rita Yousef is a senior associate and accredited specialist in personal injury law at MTM Legal. For more information visit mtmlegal.com.au