Landlords, scurrying to review their insurance policies, forecast higher insurance rates for owners and rent increases for tenants Tuesday following a California Supreme Court ruling that expanded landlords’ liability for tenant injuries.
The court ruled Monday that landlords may be liable for any defect in their rental housing that injures a tenant, even if the landlord had been unaware of the defect.
Leaders of tenant groups praised the ruling, but representatives of landlord associations predicted that already rising premiums will climb even faster because of the decision and that tenants will eventually bear the costs.
Tenants hailed the ruling as a victory for renters and dismissed the rent hike predictions.
“I think landlords will do whatever they can do to obtain the maximum rent the market will bear, whether or not this judgment came down. . . ,” said William Barth, a Los Angeles lawyer and a tenant representative on a recently disbanded city committee on rent stabilization.
Aid Against Slumlords Cited
Larry Gross, a member of the Coalition for Economic Survival, a tenants’ rights group, said the ruling may help tenants victimized by slumlords.
“Sheer maintenance and repairs are part of what you pay rent for,” Gross said. “They are not capital improvements and shouldn’t be passed on to the tenants.”
“Rose Bird raised rents,” declared Charles A. Isham, a landlord who serves as executive vice president of the Apartment Assn. of Greater Los Angeles, in reference to the chief justice. “Because of the Supreme Court decision, landlords will have to go out and get additional insurance and the rate they will have to pay will be higher. The major impact will be to increase rents.”
Isham, who owns 12 units, said he is advising the 15,000 association members to review their policies with their carriers to ensure adequate coverage.
Los Angeles’ rent control law prohibits landlords from raising rents by more than 7% a year. But they are entitled to adjust the rent to any level once an apartment is vacant. A city housing official said he strongly doubts that insurance costs will rise enough to qualify for hikes above 7% on already occupied units.
The high court ruled in the case of a Contra Costa County man who slipped in the shower of his apartment in 1978 and fell against an untempered glass shower door, shattering it. The injury left the man with a permanently injured hand. The landlord testified that he had not known the doors were made of plate glass.
James M. Udall Jr. a property manager and president of the Los Angeles Board of Realtors, said 90% of glass shower doors in Los Angeles apartments are not tempered. Udall, who manages 800 rental units in Los Angeles and Santa Monica, said he believes most landlords will simply rely on insurance, rather than inspect and replace such doors.
‘Not Surprised’ by Decision
“We (professional property managers) were not surprised by this decision,” Udall said. “And basically, we’ve been going the insurance route. But when I replace doors now, at least I’m ordering the tempered glass.”
Udall said he is not certain how landlords can protect themselves from unknown defects.
“If a landlord knows something needs fixing, he’ll fix it,” he said. “But how can you fix the unknown before somebody gets injured. . . . You’re getting to a point that a person is not responsible for his own conduct anymore. And to respond to unknown defects without having any reason to know of such defects is really asking too much.”
Arthur W. Weiss, an insurance agent who heads the Los Angeles Independent Agents and Brokers Assn., agreed that premiums probably would rise.
“Absolutely,” Weiss said. “Whenever there is a court decision affecting judgments that insurance companies have to pay, that cost is going to be passed on to the consumer. . . . It creates an additional liability for insurance carriers who are going to have to increase premiums to take care of unknown defects and claims.”
Suits Against Manufacturers
However, landlords could turn around and sue the manufacturer or the installer of the product that led to the accident, said Oakland attorney Robert W. Brower, who defended the landlord in the Supreme Court case. He said only landlords who were unable to trace the manufacturer would have problems.
Louisiana has a law that allows injured tenants to sue for liability, even if the landlord was unaware of the defect, Brower said. He noted that the California Trial Lawyers Assn. told the court in his case that Louisiana insurance companies suffered no additional losses as a result of the law.
“A larger number of plaintiffs will have the opportunity to sue so there will be a greater legal expense involved,” Brower said. “So landlords will be inspired to sue the original installer of the products and landlord-tenant litigation will be made more complex and costly.”
Times staff writer Victor Merina contributed to this article.