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CRE Landlord: Liability for the Safety and Security of Tenants

12/18/2013

The last few years have brought significant tragedy to Colorado in the form of fires, floods and random acts of violence. With the increasing frequency of random acts of violence in the news, commercial landlords and property owners must evaluate their potential exposure related to violence and criminal conduct on their properties. Most commercial landlords approach security as a matter of good business. Landlords have historically engaged in a balancing act to provide appropriate levels of security based on factors including the tenant mix, type of business operations, rents, location, and hours of operation. Security measures might include after-hours key card access, cameras in stairwells and garages, and/or periodic security patrols or on-site security personnel. Such services, however, are generally provisioned as part of the landlord’s general operations to draw tenants and are not necessarily the result of any perceived legal obligations.

In determining appropriate security measures, it must not be forgotten that it is important for landlords to consider all federal, state and municipal rules and laws that govern conduct on their property. At the municipal level, incidental liability to landlords for criminal conduct can arise through avenues such as local rules and ordinances. For example, the City and County of Denver enacted an ordinance which penalizes commercial landlords for “failing to prevent” Class I or II public nuisances on their property. This includes, among other offenses: prostitution, professional gambling, certain drug offenses, specified theft charges, gang-related criminal activity, sexual assault, and indecent exposure. (See Chapter 37 of the Denver Revised Municipal Code).

At the state level, landlord liability to injured parties for violence and criminal conduct predominately arises out of the Colorado Premises Liability Act, C.R.S. § 13-21-115 (the “Premises Liability Act”). The Premises Liability Act specifically defines a landowner’s duty of care with respect to trespassers, licensees and invitees to its property and provides the exclusive remedy against a landowner for individuals who are injured as a result of activities conducted on the subject real property. Under the Premises Liability Act, property owners have a duty to exercise reasonable care to protect invitees against dangers of which they knew or should have known. Despite the enactment of the Premises Liability Act, the boundaries of landlord liability for criminal conduct occurring on its property are not entirely clear. This is an area of law that is evolving in light of recent events in Colorado and elsewhere, but landlords will minimally be held to a “reasonable landlord” standard.

The definition of “landowner” under the statute is not limited to the actual owner or landlord of the real property, but also includes authorized agents or persons in possession of real property, as well as persons legally responsible for the condition of real property, or activities conducted or circumstances existing on real property. C.R.S. § 13-21-115(1). Accordingly, with a few exceptions, once a landlord transfers possession of leased premises to a tenant, the burden of care may shift to the tenant. Thus, it is necessary to address the shift in liability by a well-drafted lease which clearly identifies the responsibilities of the tenant with respect to activities on the leased premises. The actual “landowner” remains liable for the common areas of a shopping center or office building.

Given the above definition of landowner under the Premises Liability Act, landlords should evaluate their leases to determine where the landlord may have other exposure to security risks. Evaluating the terms of a lease is important because the courts have made it clear that they will not narrowly define the nature of dangers that landlords “should have known” about. Thus, to help protect themselves, landlords should consider including terms in their leases in which tenants have a duty to report criminal or suspicious behavior and include terms that allow the landlord to evict a tenant if the tenant is causing security risks to other tenants.

Landlords also need to be aware of any reports of criminal activity that have occurred in the local vicinity of their property. Those known acts may be enough to put the landlord on notice and require the landlord to take additional reasonable measures to better secure its tenants and their invitees even though there has never been criminal conduct at the landlord’s property. At the same time, landlords should be providing similar security measures taken by other landlords in the area to ensure their property is not vulnerable. Some additional reasonable steps landlords should consider are: placing locks on exterior doors when unlawful or concerning behavior is reported; installing good lighting and security cameras; employing security personnel; evaluating the property’s means of entry and exit in a case of an emergency; and any other measures that might be appropriate to address specific concerns associated with the property.

We encourage landlords to reexamine their security measures, and consider employing legal counsel to advise on how to minimize security risks and concerns.

Published in The Colorado Real Estate Journal, December 18, 2013.

ABOUT THE AUTHOR

Bethany A. Johnson

Attorney

Stephanie D. Loughner

Attorney