Don't Rely on Out-of-Possession Status to Avoid Liability

If you don't maintain any control over your property, don't assume that fact will shield you from liability for an accident. It is uncommon for out-of-possession owners to win liability cases with this argument. For example, if you are aware of a dangerous condition or there is an incident of gross negligence at your property, it won't matter that you don't have much to do with day-to-day operations.

In the following case, an out-of-possession owner got lucky. But the court warned that owners can't rely on their status as out-of-possession landowners to relieve them from liability in every situation. Here, a handicapped shopper was injured when a malfunctioning door of a mall elevator closed on his leg. The customer sued the city, which owned the mall; the realty company that leased and operated the mall; and the elevator company, which had been retained by the realty company to maintain the elevator.

The shopper produced evidence of prior complaints that the door of the elevator closed too quickly. As the lessee and operator of the mall, the realty company had a duty to maintain and repair the mall's elevators. In this case, it was liable for the shopper's injury because it had actual or constructive notice—from the prior complaints—of a defect in the elevator that closed on him.

The elevator company also was liable for the accident because it failed to show that it had used reasonable care to discover and correct the problem with the door—a condition that it should have been able to find. And the maintenance records for the elevator were insufficient to establish that the door of the elevator was functioning properly at the time of the accident.

However, because the city had demonstrated that it was an “out-of-possession landowner” that retained no control over the premises and was not contractually obligated to repair unsafe conditions, it could not be held responsible for the malfunctioning elevator. In situations of gross negligence, however, an out-of-possession owner wouldn't be so lucky, the court noted.

• Green v. City of New York, et al., August 2010