Landlord’s Liability for Criminal Acts

One thing the tort reform movement has done is convince people that around every corner is a successful lawsuit waiting to bankrupt them. This is not true, of course, but its widely believed that people routinely get millions for minimal injuries or during the course of committing a crime themselves or even if they are just a sympathetic victim even though the other person did nothing wrong. One of my favorite emails with “outrageous lawsuits” is this one. Even though none of them are true, you have to admire the work of that lobby because a lot of people think they are.

With regard to property, this leads to a lot of questions in my office about when a landlord is liable for the acts of other people on their premises. This post explores one facet of that issue in Arkansas via a 2006 case, Lacy v. Flake & Kelley Mgmt.

Ms. Lacy was a sympathetic victim if ever there was one. Leaving her office in the Mercantile Bank building one afternoon, she was attacked, robbed, and raped by four men. The building was owned by U.S. Bank, and managed by Flake & Kelley Management, who were authorized to “hire, supervise, and fire employees in the care, management, and operation of the premises.” Flake & Kelley had contracted with a security firm to provide security in the afternoons and on the weekends. Lacy filed suit against U.S. Bank and Flake & Kelley arguing they had negligently failed to provide adequate security.

Ms. Lacy lost in the trial court and appealed, arguing primarily that the lease agreement U.S. Bank and Flake & Kelley had with her employer created a duty on their part to protect her from criminal acts. The specific language from the lease was:

3.14 Tenant and Tenant’s agents, employees, and invitees will comply fully with all requirements of Rules of the Building which are attached hereto and, which are a part of this Lease as though fully set out herein:
….
4.1 Landlord shall have the following rights exercisable without notice or demand and without liability to Tenant for damage or injury to property, persons or business (all claims for damage therefore being hereby released by Tenant), and without effecting an eviction or disturbance of Tenant’s use or possession of the Premises or giving rise to any claim for setoffs or abatement of rent:
….
(g) To take all such reasonable measures as Landlord may deem advisable for the security of the Building and its occupants, including without limitation, the search of all persons entering or leaving the Building, the evacuation of the Building for cause, suspected cause, or for drill purposes, the temporary denial of access to the Building, and the closing of the Building after normal business hours and on Saturdays, Sundays and holidays, subject, however, to Tenant’s right to admittance when the Building is closed after normal business hours under such reasonable regulations as Landlord may prescribe from time to time which may include by way of example but not of limitation, that persons entering or leaving the Building, whether or not during normal business hours, identify themselves to a security officer by registration or otherwise and that such persons establish this right to enter or leave the Building.

(1) to close the Building at 6:00 p.m. or such other reasonable time as Landlord may determine, subject, however, to Tenant’s right to admittance under such regulations as shall be prescribed from time to time by Landlord and set out in the rules of the Building.

That language, Lacy argued, gave rise to a duty to protect her from criminal acts of third parties. The Ark. Supreme Court rejected this argument, first stating the basic law that “Arkansas follows the general rule that a landlord does not owe a duty to protect the tenant from criminal acts. Only an express agreement or assumption of duty by conduct can remove a landlord from the general rule of nonliability.”

The Court then addressed the specific language of the lease and found:

“A plain reading of the lease clearly shows that this has not occurred. U.S. Bank may have assumed a duty to monitor entry into the building however, there is nothing in the lease terms that could give rise to a duty to protect tenants from criminal attacks by third parties in the parking lot. Moreover, Lacy points to no conduct by either U.S. Bank or Flake that could give rise to such a comprehensive duty. As a result, Lacy’s first argument must fail.

One other interesting note for you commercial landlords. The Supreme Court also referenced another case and reiterated the rule that implementation of certain practices such as lighting, evening patrols, and communicating with residents regarding suspicious activities help assure the quiet enjoyment and basic safety of the tenants, in addition to providing a modicum of deterrence to criminal activity. We are reluctant to hold that a landlord’s use of these modest, conscientious measures imposes a full blown duty to protect tenants from third party criminal activities.

Hopefully, this will quiet some fears. One important distinction does need to be made though – this does not apply to someone who is on your premises to do business. This just applies to the landlord-tenant relationship. If someone is shopping at your store and you have a history of criminal attacks there you will likely have a duty to take steps to prevent them.