Recent Case Clarifies "Reservation of Control" Exception to Liability Exception for Landlord Out-of-Possession


In Pennsylvania, a landlord out-of-possession is generally not responsible for injuries suffered by third parties on a leased premises. Under Pennsylvania law, a landlord out-of-possession may incur liability if: (1) the landlord has reserved control over a defective portion of the demised premises; (2) if the demised premises are so dangerously constructed that the premises are a nuisance per se; (3) if the landlord has knowledge of a dangerous condition existing on the demised premises at the time of transferring possession to a tenant and fails to disclose the condition to the tenant; (4) if the landlord leases the property for a purpose involving the admission of the public and he or she neglects to inspect for or repair dangerous conditions existing on the property before possession is transferred to the tenant; (5) if the landlord undertakes to repair the demised premises and negligently makes the repairs; or (6) if the landlord fails to make repairs after having bee n given notice of and a reasonable opportunity to remedy a dangerous condition existing on the leased premises.

The United States District Court for the Eastern District of Pennsylvania, applying Pennsylvania law, recently granted summary judgment in favor of the defendant property owner for an alleged trip and fall on the property's steps shortly after a recent snowfall. Hymes v. Great Lakes Warehouse, 2014 U.S. Dist. LEXIS 34064. The property owner entered into a triple-net lease with its tenant to lease a property located in Erie, Pennsylvania. The lease gave the landlord the right to inspect the demised premises throughout the lease term and required the tenant obtain approval before making any improvements upon the property. Under the lease, the tenants were solely responsible for keeping the parking areas, walkways and steps leading into the demised premises free from snow and ice.

In granting the landlord's motion for summary judgment, the Court reasoned that an out-of-possession landlord in Pennsylvania is not liable for injuries merely because he or she owns the land. Rather, liability is premised primarily on possession and control and not merely ownership. This concept is based on the principle that the law regards the lease transaction as the equivalent to the sale of the land for the term of the lease. The Court found that the mere fact that the lease allowed the landlord to reserve the right to inspect the property and required the tenant to obtain approval before improving the property did not trigger the reservation of control exception. The landlord's actions during the term of the lease, which did not include any regular inspections of the property, contributed to this ruling.

Comment: There are several exceptions to the rule that an out-of-possession landlord is not responsible for injuries suffered by third parties at a leased premises. Certainly, this article should not be taken to mean that a landlord will never be responsible for injuries suffered by third parties. It is also helpful to make sure that the language contained within a lease agreement is clear and succinctly sets forth the responsibilities of all parties involved. 

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