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Inadequate security: the new liability crisis.

Inadequate security claims have become one of the fastest growing areas of tort liability facing companies today. Real estate companies, particularly those that manage multi-unit residential properties, have found themselves at the top of the list of most frequently sued businesses during the past decade.

"Major Developments in Premises Security Liability," a recently published study by this author and Susan J. Dunnell, found that property management companies and owners of residential sites were sued more than twice as often as any other businesses on the list. The study, which was conducted from 1983 through 1992, included over 200 cases from across the country.

A number of significant trends, both statistical and legal, were identified in this study. The following are a few examples:

* Rape and sexual assault account for the most common incident leading to a lawsuit.

* Apartment units, parking areas, and hotel rooms are the most common locations for a violent crime to occur.

* The average settlement in violent crime cases exceeded $600,000, while the average jury verdict was $1.3 million.

Premises security liability

Inadequate security is generally referred to as premises security liability--that is, the civil liability of owners for the foreseeable criminal acts of third persons.

Inadequate security claims arise when a property owner or an agent/manager fails to provide a reasonably safe environment, and as a result, someone is victimized by the criminal conduct of another person. Frequently, the assailant is known neither by the victim nor by the property owner and is never apprehended.

While premises security cases have been around for several years, they are still not as common as some more traditional torts, such as the typical "slip-and-fall" case. One of the more notable cases of premises security liability is the so-called "Connie Francis" case, brought by the singer who was raped in a motel in the early 1970s. Her $2.5 million award alerted property managers to the consequences of inadequate security.

What makes up a security program?

A uniformed guard patrolling a parking lot or screening visitors at a reception desk is only a small part of a property's security program.

To achieve an effective level of security, managers should notify residents of crime trends, control master keys, prescreen employees, repair broken locks, and take other pro-active responses to prevent crime from occurring.

One example illustrates the impact of even minor negligence in undermining building security.

An assailant entered a woman's window at night by the rear fire escape. She was repeatedly raped and was only able to escape when the assailant fell asleep. When the woman sought help from other tenants, the assailant escaped and was never caught.

The woman then sued the owner/manager for providing inadequate security. Evidence showed that the resident had a defective window lock that she had asked to have fixed several times, to no avail. Further, she had requested that ventilation locks be installed so she could keep the windows open, yet locked, at night in her un-airconditioned apartment.

In addition, the rear fire escape was mounted to the ground, allowing access to any passerby. The woman's attorney also presented evidence of many prior break-ins in her building where access was gained by the fire escape, including one six months before. That resident also had a defective window lock.

In this case, the total verdict was $711,000 plus interest, minus 8 percent for the plaintiff's comparative negligence in leaving the window open.

Recent legal developments

Nationally, major developments in premises security law include a change in the rules on what constitutes notice of risk, otherwise known as "foreseeability," and the increased use of states' consumer protection or deceptive trade practices acts. As a result, it is easier for victims of violent crimes to sue and obtain higher verdicts for injuries.

Foreseeability. In premises security cases, the law requires a plaintiff to produce evidence of the foreseeability of criminal conduct occurring on a premises in order to establish the defendant's legal duty or responsibility to prevent the injury-producing incident. Absent this evidence, a defendant could argue that the incident was an independent, unforeseeable act that could have been neither anticipated nor prevented.

Foreseeability does not require that the property owner know who will commit the crime, when it will occur, or what type of crime specifically will occur. Rather, foreseeability is a legal concept that requires property owners to take the risk of crime into consideration while managing the day-to-day affairs of their businesses.

The traditional rule on foreseeability in use in many jurisdictions requires proof of a prior similar act before the property owner would be aware of, or on notice, that an event similar to the one committed against the plaintiff could happen. Referred to as the "prior similar crime" rule, this traditional rule precludes recovery by the plaintiff in the absence of such evidence.

This rule is based on the theory that a property owner must generally be aware of a risk (foreseeability) before a legal duty to prevent it would apply.

During the past 10 years, however, several state supreme courts have held the "prior similar crime" rule to be unfair to plaintiffs. These courts have stated that the rule has the effect of victimizing plaintiffs twice: first, when they are victims of the attack, and second, when they are unable to recover in a lawsuit if they happen to be the first victim of a crime at that location.

The trend is to replace the "prior similar crime" rule with one of several broader rules or tests. One of the new rules is known as the "totality of circumstances" test. This test allows plaintiffs to present evidence other than a prior crime to establish the foreseeability of the criminal act.

An example will help to illustrate this interpretation. A doctor affiliated with a hospital and his wife parked in a lot across from the emergency room. Although the hospital had three security guards on duty, none were assigned to that lot, even though emergency room areas are usually high crime locations.

Returning from the hospital, the couple was attacked by an armed assailant, who shot the doctor in the chest. The gunman escaped and was never apprehended. The doctor suffered massive injuries, including the loss of a kidney.

The doctor sued the hospital for inadequate security and the hospital's insurance company for participating in the hospital's decision against arming its security guards.

Although the initial court found that foreseeability was not proved, the state supreme court reversed the decision, citing several factors including the lighting, the types of crimes committed in the area, and the nature of the defendant's business.

The court held that by requiring an identical crime to be committed, the property owner was getting "one free assault" before being held liable.

Deceptive trade practices

Perhaps the single most significant development in premises security litigation is the increased use of states' deceptive trade practices and consumer protection acts to bring suits against property owners. Under these acts, which have been legislated during the past 10 years, plaintiffs can recover up to three times their actual losses, plus legal fees and costs.

A violation of a state's consumer protection act usually occurs when a defendant/business owner has engaged in unfair or deceptive business practices with a consumer. Plaintiffs bringing a claim under these laws are asserting that the defendant misrepresented critical information, otherwise deceived them, or violated a separate provision of state laws. As a result of such actions, the plaintiff has suffered harm.

In one case, a woman leased an apartment in a building in which signs, visible to passersby, were posted at various locations. They read: "Warning--Each Unit Protected by Electronic Security System."

When the woman asked for help in operating her alarm, the leasing agent and the assistant manager informed her that the unit was safe from crime and she would not need to use her alarm. She never learned how to operate the system.

One night, an assailant jimmied the flip-lock on the sliding glass door, entered the unit, and raped the woman. She sued the property management company for negligent security and for violating the Texas Deceptive Trade Practices-Consumer Protection Act (DTPA). In backing her DTPA claim, the plaintiff stated that the defendants misrepresented the alarm system as centrally monitored.

She sought punitive damages, claiming that the defendants' conduct showed a conscious indifference to her safety. She also claimed that the defendants knowingly violated the DTPA and that she was thus entitled to treble damages.

The jury determined that the defendants had violated the DTPA. The plaintiff was awarded $1.41 million in compensatory damages, $2 million in exemplary damages, and $380,000 in attorney fees.

By reading this and similar cases, one can quickly see that security is not limited to the presence of security personnel, but in fact includes a host of management practices, the installation of hardware, and an understanding of legal issues.

Problem areas for providing security

The critical question is, "What can property owners and managers do to improve security and hence reduce the risk of liability?"

To answer that question, the most common problem areas of a site's operation must be identified. In general, they fall into three categories: administrative factors, interior security measures, and external security measures.

Administrative factors encompass foreseeable criminal conduct. For example, prior complaints from residents about criminal incidents should put a property owner on notice about the risk of future crime. Other administrative factors include:

* Pre-employment screening of employees.

* The existence of policies and procedures relating to security matters.

* The amount of training provided to security and nonsecurity staff.

* Sufficient supervision of employees.

Some concerns of interior security include:

* The quality and quantity of locking systems for main entries and for the doors and windows of individual units.

* Control of the master keys and spare unit keys.

* Control of access to the buildings.

* Installation of security equipment such as alarms and closed-circuit television systems.

* Interior lighting.

On the exterior of a property, the most common problems arise from the following:

* Poor control of access to the site.

* A lack of lighting in parking areas.

* Overgrown foliage.

* The lack of security personnel as a presence to deter crime.

While there are numerous other security issues to be concerned with, these are the most common areas in which inadequate security has led to the occurrence of crimes. As a result of these deficiencies, owners as well as managers have been held liable.


If security were reduced to a single concept, it would have to be "awareness." Property managers must develop an awareness of what constitutes risk at their sites, involve tenants in the process of developing a viable security program, and integrate security practices into the everyday management of the facility. If these techniques are practiced consistently, premises liability will be reduced.

Tips for Improving Property Security

Numerous measures can be taken to improve security at a site. Property managers may want to consider the following when evaluating their sites' security programs:

* Do not make any representations to prospective residents or others about how safe the site is.

* Have written policies and procedures for all security-related matters.

* Regularly inspect the property for security deficiencies, such as burned-out light bulbs, broken locks, and forced openings in fences.

* Keep abreast of crime levels within the site and in the surrounding neighborhood.

* Document residents' complaints about crime-related problems.

* Effect repairs to security equipment as soon as possible.

* Obtain independent evaluations of the site's security program.

* Keep informed about trends in premises security litigation.

* Document all actions taken to maintain the security program.

* Enlist the aid residents in maintaining the security of the site.

* Advise residents about occurrences of crime that could affect them.

* Maintain a proactive approach to the problem of crime. Do not wait until a crime has occurred to correct a deficiency.

If the site does employ a security staff, then the following should be considered:

* Conduct pre-employment screening of applicants, including criminal history checks on those to which master keys will be issued.

* Be sure that staff members are properly trained for their positions.

* Provide supervision of all security personnel, whether they are contract or in-house employees.

Most of these tips are simple and inexpensive ways to improve property security. They take only a few minutes a day for follow-up. Other aspects of a security program may be expensive. However, they are well worth it when the consequences of an attack on a resident because of poor security are considered.

Norman D. Bates, J.D., is president and founder of Liability Consultants, Inc., in Framingham, Massachusetts. He is a member of the faculty of the College of Criminal Justice at Northeastern University in Boston and has taught courses and seminars on civil liability and security. Mr. Bates is chairman of the Boston chapter of the American Society of Industrial Security.
COPYRIGHT 1993 National Association of Realtors
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993 Gale, Cengage Learning. All rights reserved.

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Title Annotation:includes related article
Author:Bates, Norman D.
Publication:Journal of Property Management
Date:Jul 1, 1993
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