Out-of-Possession Exemption

December 17, 2019

Brooklyn real estate lawyers at Korsinsky & Klein, help individuals and companies with real estate litigation and discuss the out-of-possession exemption rule in effect in New York.Recently, the New York Court of Appeals made a unanimous decision that affected New York City building owners and tenants. This ruling applies to landlords, and is a reversal from one that was handed down in 2018 by the Appellate Division, First Department. In short, New York City building owners have a duty to keep their sidewalks free from ice and cannot escape this responsibility by alleging that they are out-of-possession landlords.

The original lawsuit resulted when a Brooklyn man was outside his place of employment and fell on ice. His company, SDJ Trading, was leasing the building from Troon Management. He sued Troon Management, asserting that they were liable for not keeping the sidewalks cleared. The company’s defense was that the lease between them and SDJ specified that SDJ was responsible for keeping the sidewalk at the building clean and free from ice and snow.

Historically, out-of-possession landlords have not been held responsible for personal injuries to third parties or tenant employees resulting from unsafe property conditions when control has been given to the lessees. Troon also claimed that they were an out-of-possession landlord, meaning that even though they owned the building, the tenant had control of the property. Troon subsequently moved to have the lawsuit thrown out, and it was ruled that Troon was not liable for the employee’s injuries.

The Decision

The reversal was based on a ruling from 2003 that shifted liability for unsafe sidewalks from the city to the adjoining property owners. This was done to make landlords responsible. New York City Administrative Code §7-210 states that property owners are liable for personal and property injuries, including fatal ones, when said owners fail to maintain sidewalks by keeping them reasonably safe.

Associate Judge Jenny Rivera wrote that owners may not transfer exposure, duty, or liability for negligent maintenance that leads to injuries. This also applies to out-of-possession landlords; they cannot delegate the responsibility to their lessees. She also wrote that the code refers to owners of real property, which does not exclude those claiming to be out-of-possession landowners. The court’s decision was based on a plain reading of this statute.

Property Insurance

A section in New York City law requires property owners to have liability insurance. This is further proof that the law was designed to have landlords be responsible, even if a lease reads differently. However, there are circumstances where landlords may not have to pay for these types of injuries and damages. Certain property owners have their tenants agree to provide maintenance for a property if the owner is absent, and these tenants may also agree to compensate the owners for any costs that result from this liability.

Brooklyn Real Estate Lawyers at Korsinsky & Klein, LLP Help Individuals and Companies with Real Estate Litigation

Tenants, landlords, and individuals in need of skilled legal guidance regarding real estate negotiations and litigation can reach out to the experienced Brooklyn real estate lawyers at Korsinsky & Klein, LLP. For an initial consultation, call us at 212-495-8133 or contact us online. Located in Brooklyn, New York, and Lakewood, New Jersey, we serve clients throughout Manhattan, Long Island, and Westchester, New York.