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Security liability: making business pay for crime.

As violent crime in America continues to grow, its victims are beginning to fight back. Because criminals generally have no funds to compensate their victims, people who are injured on or even near the property of others are suing the owners and managers of that property.

In the past, courts generally would not impose a duty on a business to protect others from the criminal acts of third parties occurring on the premises. But in the last 10 to 15 years, some courts have held certain businesses liable for injuries suffered by employees or clients.

For example, businesses that fail to provide security that purportedly created an opportunity for someone else to commit a crime have been liable--along with the business' owner or manager--for the victim's injuries.

And, owners and management companies are not the only ones being sued. Anyone responsible for the property, including commercial tenants, can be the target of a victim's claim. The principle is the same: if you are in charge of a business, you may have an obligation to provide security.

Duty to protect

The key is whether a business has a duty to protect someone. Consider the following:

Did the business know or have reason to know that criminal activity was already occurring or was about to occur? In these situations it is easy for courts to conclude that a business is liable.

In one case, several armed and drunken men cursed and taunted other patrons of a fast-food store in plain sight of store employees. Only after a fight began and a patron was injured were police called. The store was liable for the patron's injuries, the court said, because employees failed to demand that the men leave the store, failed to notify the police in a timely manner, and failed to warn the customers before the fight began.

Was criminal activity foreseeable, even though it was not actually occurring or about to occur? These situations make for harder cases, and the courts are split. Generally, if the place or character of the business or past experience indicates that the business should reasonably anticipate criminal conduct by third persons, the business may be under a duty to take precautions against it.

In the following cases, a court has held that a criminal act was foreseeable:

* A hotel convention guest was assaulted and injured in the hotel's parking lot. The court found that the hotel should have known such acts were likely to occur because of similar assaults in the vicinity. In addition, the hotel had failed to comply with its own security policy for large conventions, which called for hiring extra security personnel at such times.

* An apartment tenant whose lease stated that a resident could require the property owner to change or re-key the locks for a fee asked to have her locks changed. However, the manager refused, telling her that he and the maintenance man carried the only two sets of keys to her unit. The tenant was later raped when an assailant with a duplicate key entered her apartment, and the management company was found liable.

In a few cases, the courts have said that a crime was not foreseeable:

* When an intoxicated driver crashed through a restaurant's glass wall and injured a customer who was waiting to be seated, the court held that the probability of that act was so slight as to be unforeseeable as a matter of law.

* A customer in a hair styling salon was injured during a robbery. Although the salon had been burglarized two years before and another store in the same shopping center had been burglarized three months earlier, the court held that the salon owner had no reason to know that criminal activity dangerous to her customers was likely to occur.

Has a promise been made to provide security? Courts do not look kindly on a business that claims to provide security measures and then fails to do so.

* In one case, an apartment tenant jogging at 3 a.m. through his complex was shot, and his assailant was never captured. The man sued the property management company, claiming that the leasing agent had told him that off-duty police officers patrolled the site. Although the leasing agent denied making that statement, the management company settled the case for $128,000.

* In another case, a customer was raped at an all-night laundromat that posted signs stating that the premises were supervised by an employee. The rape occurred when the attendant left momentarily to get change. While the verdict probably will be appealed, the laundromat lost a $3.8-million decision.

Negligence after the crime

A business' failure to provide security potentially can cause harm to someone by providing an opportunity for criminal acts to occur. But what about negligence that occurs after the criminal act has taken place?

A department store shopper was injured in a scuffle that occurred when security guards chased a fleeing shoplifter who had resisted arrest. The court found that the guards were negligent in pursuing the shoplifter because they should have anticipated that the shoplifter would then run and possibly injure someone.

In another case, business owners were held liable for responding inappropriately to a guest's peril.

A woman was raped and left bound and gagged in her motel room. Her assailant left but threatened to return and kill her. She managed to kick the telephone receiver off the hook and contact the front desk clerk. She explained what had happened and expressed her fear that the man would return.

After what she later described as "a long period of silence," someone else came onto the line and asked who she was. She again explained her situation, but the motel staff delayed making a call to police for several more minutes. Moreover, the clerks refused to come to the woman's aid and simply posted two male hotel employees in the hall outside her door until the police arrived.

The court found that the motel's employees were negligent in responding to the woman's distress, noting that a reasonably prudent person would have anticipated mental anxiety and possible bodily injury resulting from the delay.

Practical tips

With lawsuits of this type on the increase, what can you do to protect yourself as an apartment owner or manager?

No policy can prevent all liability, as these types of issues are likely to be decided by the courts on a case-by-case basis. But at least ten areas of concern have arisen in recent court cases that you should evaluate along with your attorney and security experts. Ask yourself the following questions:

Have crime or drug- and alcohol-related problems occurred in the area? If they have, consider installing security equipment at or near your property, including fences, lighting, posted warnings, and security guards.

Have you advertised security patrols, security fences, or alarm systems to attract tenants? Discuss with your legal counsel whether this representation can make you more vulnerable to a suit for deceptive trade practices, which can limit defenses and increase damages.

Has enough criminal activity occurred in your area to prompt the courts to consider future acts as foreseeable? If so, consider consulting a security expert and taking appropriate measures to improve your security.

Do you have vacant property that should be demolished? If so, discuss the pros and cons of demolition versus monitoring it for criminal activity.

Are you complying with all laws regarding operation of the property? Failure to do so might enable a crime to be committed--and a claim to be filed. For example, if a local ordinance requires doors and windows of a vacant structure to be kept securely closed to prevent unauthorized entry, failure to do so could be considered negligence as a matter of law.

Are you controlling access to any property you own in high-crime areas? Consider the implementation of policies and procedures for employees who enter and leave outside of normal business hours.

Have you warned tenants, employees, or patrons of any potential criminal activity on or near the property? Consider adding a disclaimer of protection by the landlord to leases.

What immediate actions would you take when potential criminal activity is discovered? Consider how you and your employees might respond with sensitivity to victims of crime.

Are you aware of any written or oral agreements that might create a greater duty to provide security? For example, have you advertised that your apartments have "a security guard on duty," or has a leasing agent promised "a secure environment" to a prospective tenant? Discuss this issue with your attorney and employees.

Have you provided training to all employees on liability and security issues? If not, consider how your attorney and security expert might help you implement such a training program.


In today's climate of increasing violent crime--and increasing numbers of lawsuits filed against building owners and managers--a thorough analysis of your building's and business' exposure to liability in a potential crime is critical.

By understanding your building's specific needs and closing any gaps in your security systems, you can reduce dramatically the chances of a monumental loss in a liability case--and you might even prevent a crime from occurring.

Judy Osborn is a partner with the Austin, Texas, law firm of Brown McCarroll & Oaks Hartline. Her practice emphasizes real estate and banking law. She earned her bachelor's and law degrees, as well as a master's degree in journalism, from the University of Texas at Austin.
COPYRIGHT 1993 National Association of Realtors
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Title Annotation:Legal Issues
Author:Osborn, Judy
Publication:Journal of Property Management
Date:Mar 1, 1993
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