Background onThan v Galletta & Ors

In Than v Galletta & Ors, the plaintiff rents an apartment that has an internal stairwell in the common area.  The apartment is owned by the landlord and managed by the managing agent. The light fittings located in the stairwell were malfunctioning on the night of her fall, causing her to misplace her footing and she consequently sustained a serious foot injury. 

Over the three months leading up her accident, the plaintiff made two complaints to her managing agent, stating that “the light in the stairwell is out again. It’s dangerous walking through the stairwell at night as we can’t see anything.” The managing agent engaged an independent contractor to fix the lighting after the first complaint.  However, the lighting stopped working again so the tenant made a second complaint, about a month before her accident.  

The managing agent failed to inform the landlord of the second complaint and did not take any adequate steps to rectify the issue.  Both the landlord and the managing agent have been aware of a history of the light fittings malfunctioning but neither of them investigated the issue until after the plaintiff’s fall.

Who has a duty of care to a tenant – the landlord or the managing agent?

According to Than v Galletta & Ors, the landlord and the managing agent both have a duty of care to the plaintiff and they have breached the duty.

The landlord breached their duty of care by failing to make enquiries with the managing agent as to the cause of the lighting problems after the first complaint. 

The court found that a landlord cannot fully delegate all of their inspection and maintenance obligations to the managing agent, if the landlord has a discretion to approve all non-emergency maintenance and repair under the managing agency agreement.

Similarly, the managing agent breached their duty of care by failing to take steps to deal with the risk posed by the unlit stairwell, despite knowing its problematic history and having received two complaints from the tenant.

Can the managing agent rely on their managing agency agreement?

Usually there is an indemnity clause in a managing agency agreement that allows the managing agent to be indemnified by the landlord for claims in the course of or arising out of the proper performance or exercise of the managing agents’ powers, duties or authorities under the agreement. 

The indemnity clause did not operate in Than v Galletta & Ors because of the managing agent’s failure to properly perform its contractual obligations, which include attending to the repair of the light fittings in a timely manner.

If the landlord escaped full liability – why does the case still matter to landlords?

Luckily for the landlord, there were various factors that influenced the court’s decision to apportion 100% of liability to the managing agent and 0% to the landlord.

However, this case still reminds all landlords to take every care possible to manage and respond to maintenance requests from their tenants. After all, can you really afford to lose a tenant in this current market?

Practical tips to avoid a negligence claim

For landlords and property investors

• Familiarise yourself with the approval process for maintenance and repair works under the managing agency agreement you have signed. If you are looking for a property manager, feel free to contact Omega Legal for a referral.

• Be aware of your inspection and maintenance obligations and that you cannot delegate all of your responsibilities to the managing agent. This may include approving all non-emergency maintenance and repair under the managing agency agreement.

• Ensure that you have the resources to attend to repair requests in a timely manner. For example assign a second contact person to attend to any urgent requests when you are unavailable.   

• Agree on a minimum threshold for repair works before signing a managing agency agreement under which repairs may be undertaken without your approval.

• If in doubt, specify what repair obligations are assumed by the landlord and by the tenant respectively to avoid dispute in the future.

For managing agents

• Do take the time to review your managing agency agreement if you have not done this in a while and keep up to date with your professional liability insurance. 

• Be aware and inform your staff that any indemnity from the landlord under a managing agency agreement is unlikely to operate if the event giving arise to the indemnity is caused by the managing agent.

• Ensure that you allocate sufficient resources to attend to repair requests in a timely manner. For example assign a second contact person to attend to any urgent requests when you are unavailable.  

• Agree on a minimum threshold for repair works under which repairs may be undertaken without approval from the landlord.

• If in doubt, specify what repair obligations are assumed by the landlord and by the tenant respectively to avoid dispute in the future.

Do you have any questions regarding a property you own or manage? Contact Omega Legal at info@omegalegal.com.au anytime.  We look after the needs of property investors and their managing agents.

This article was first published on LookUpStrata