Habitability claims become the new type of personal injury lawsuit

We’ve all seen the ads for personal injury lawyers plastering the airwaves and the billboards touting the millions of dollars recovered by these firms. Personal injury practitioners are in a crowded market, and with fierce competition, many have carved out a niche in targeting the deep pockets of landlords.

It should go without saying that the foremost responsibility of housing providers is to maintain the premises in a liveable condition. Rest assured, attorneys are salivating over the opportunity to sue landlords when California’s implied warranty of habitability is breached. Here are some examples, but this list is not exhaustive.

• Faulty wiring

• A lack of heat, water, or electricity

• Broken windows and doors that compromise security

• Pest infestations like rodents and cockroaches

• Structural problems like damaged walls or a leaky roof

• Hazerdoes substances like chipping lead paint or mold

• Lack of proper sanitation facilities

• Unsafe floors, stairways, and railings

• The absence of essential facilities like functioning toilets, sinks, stoves, and refrigerators

Aggrieved tenants are prone to do one of the following or a combination of them:

• Withhold rent by claiming untenable conditions in the unit that pose a threat to health/safety, or use “repair and deduct” in certain circumstances to pay for repairs out of pocket to fix issues that render the unit uninhabitable. This right comes from California Civil Code § 1942.

• Use grievances about inhabitable conditions as a defense to an unlawful detainer (eviction) action.

• Without notice to the landlord, call code enforcement to report any problems in the unit that the landlord is unaware of, which may trigger a Notice of Violation.

• “Repair and deduct,” meaning the tenant fixes uninhabitable conditions themselves and deducts the cost from their rent, under specific circumstances.

• Terminate the lease and seek relocation payments.

• Sue the landlord.

An enterprising personal injury attorney will argue that it was foreseeable that someone could be injured due to an unrepaired hazard, the landlord failed to make reasonable efforts to fix the hazardous condition, and the failure to act caused an injury. Damages can be recovered for rent paid, relocation expenses, medical expenses, emotional distress, etc. Business is good for attorneys who “shake down” housing providers. See some of the windfall payouts made to tenants →

Failing to maintain the unit in habitable condition can result in a host of consequences, including a lawsuit, but landlords should not assume their insurance policy will save them. 

In the tenant-friendly state of California, carriers have seen a precipitous spike in lawsuits related to habitability claims, which have become more frequent as tenants become increasingly aware of their rights. Settlements and legal defense costs have skyrocketed, as well. If there is a jury trial, the tenant’s peers are all too willing to award massive payouts.

Moreover, lawsuits are no longer limited to egregious acts; even well-meaning landlords are being sued over small issues that can spiral into significant lawsuits. The result: Rather than raising premiums that would put coverage out of reach for landlords who can’t afford it, carriers have elected to exclude habitability coverage altogether to stop hemorrhaging money.

Housing providers are urged to go through their current policy with a fine-tooth comb to determine what is covered and what isn’t. If habitability is not included, ask your insurance agent if limited coverage can be obtained separately.

An ounce of prevention is worth a pound of cure. 

Our strong preference is to avoid disputes that can quickly evolve into a morass. Here are some pointers:

Responding to repair requests promptly: When there is a problem reported, many landlords kick the can down the road. Don’t procrastinate. The landlord has to pay the plumber anyway, so why wait a week? Why not call them the same day? We want to nip problems in the bud.

Document correspondence with tenants: If acrimony arises, we not only want to create the narrative that our clients responded promptly to repair requests; we want to back that up with documentation. Here’s an example:

Making it easy for tenants to request repairs: We want to make it seamless for renters to report any defects in the unit, whether by text, email, or an online portal.

Require that repair requests be made in writing: Ideally, there is a clause in the lease that requires the tenant to formally request repairs. If a dispute arises later on in the tenancy, we can point to this part of the lease and argue that the landlord received no notification of a problem that needed to be fixed.

Take photos before and after repairs are made: By now, housing providers should be aware of AB 2801, a law that mandates that landlords provide photographs of the unit to justify security deposit deductions for repairs or cleaning. While the law only obligates housing providers to take photos at move-in and move-out, and before any repairs or cleaning are deducted from a security deposit, it is prudent for landlords to take photos of a problem that is identified and photos after it has been fixed.

Hire a professional whenever there is a suspicion of mold: In an earlier venue, we said “mold is gold” for tenants and their attorneys. We need to call a professional to test for mold. If it is discovered, it needs to be remediated. What is the underlying source of the moisture? This must be addressed without delay.

Parting thoughts

By being proactive, housing providers can avoid costly lawsuits. Take copious notes and preserve written records of work orders, invoices, correspondence with tenants, etc. When disputes arise and legal action is threatened, it's imperative that housing providers tether themselves to a law firm with vast experience in defending claims made against them.