Our clients frequently ask about the community’s potential legal liability for conditions and activities in the common areas or for claims asserting negligence. This article summarizes those legal standards and some of the considerations and criteria which may affect a community’s responsibility. The legal standards based on premises liability and general negligence concepts are well-settled and consistent. While those legal standards can be easily summarized, an association’s level of responsibility is never absolute one way or another because the legal standards must be applied to different factual scenarios.
The status of the person who is injured (claimant) is critical to an understanding of the potential liability of an association. In the community association setting, there are four categories of claimants to be considered: “owner”, “invitee”, “licensee” and “trespasser.” The community’s obligations will vary depending upon the status of the claimant (as well as other considerations discussed further below). The following summary assumes that there is no specific contract between the association and the claimant which has altered the parties’ respective risks and responsibilities.
The Status of the Claimant Makes a Difference
The first category is a person who is an owner in the community. This category would include an owner’s family and their guests. The duty owed by an association to an owner initially arises from the provisions in the governing documents, and in particular, the repair and maintenance provisions of the declaration of covenants. If those provisions do not resolve the issue of responsibility, the Court then considers general negligence principles. The overarching general negligence principle is that the property must be repaired and maintained in accordance with what a reasonable person would do under similar circumstances. The duty owed by an association to all non-owner claimants is different. They are considered pursuant to the other three categories (invitee, licensee and trespasser) discussed further below.
Concerning the “owner” claimant, what are the provisions within the governing documents that describe the association’s responsibilities? This would include covenant provisions describing how the association manages and operates the common area. Also, covenants which provide that assessments are to be used for safety, maintenance and repair of common areas, impose a responsibility of the association to spend money on these activities. Covenants which provide for the operation of recreational and other facilities will impose responsibility on the association to conduct those operations reasonably. Provisions in the articles of incorporation or bylaws which provide for the operation, maintenance, repair, improvement, etc. of the common areas may impose additional responsibilities for the association to fulfill. A review of the management contract is appropriate. That contract may specify supervision of operations of the common areas, inspection of the premises, and hiring of contractors to maintain and repair, and to provide snow removal, lighting, security, etc. The presence of those terms in the management agreement reveals an expectation on the part of the association that those functions should be fulfilled.
We will discuss the various factors which can show whether the association acted reasonably, after first summarizing the other categories of claimants. These are the traditional premises liability claimants (as defined by Colorado statute) for all such liability claims not involving a common interest community owner.
The first of those is an “invitee”. This is a person who comes to the community to conduct business in which the community and the invitee are mutually interested, or else a person who enters upon the land based on an express or implied invitation. Examples of an invitee are the association’s contractor, or a visitor present on the common area to conduct business with the association. An invitee claimant may recover for damages caused by the association’s unreasonable failure to exercise reasonable care to protect against dangers of which it actually knew or should have known.
The second category of non-owner claimants is a “licensee.” A licensee is a person who enters or remains on the association’s land to advance his/her own interests, pursuant to the association’s permission or consent. This category includes a non-owner who comes to the association’s common area to exercise, or a social guest. A licensee claimant can recover only for damages caused by the association’s unreasonable failure to exercise reasonable care with respect to dangers created by the association of which the association actually knew.
The fourth and final category of non-owner claimants is a “trespasser.” This means a person who enters or remains on the association’s land without the association’s consent. A trespasser can only recover for damages willfully and deliberately caused by the association.
How To Determine Reasonable Conduct
The question arises as to what is a “reasonable” level or standard of maintenance, repair or operation. As noted above, what is reasonable for an owner claimant will initially depend on the provisions in the governing documents. What is reasonable for the three categories of non-owner claimants will be based on an objective standard of reasonable conduct under the circumstances after considering the claimant’s status.
This leads to an analysis about how the duty or responsibility is fulfilled. This involves consideration of many factors, including the risk involved, the foreseeability and likelihood of injury as weighed against the social utility of the actor’s conduct, the magnitude of the burden of guarding against injury or harm, and the consequences of placing the burden upon the association. [For a more detailed discussion of these issues by the Colorado Supreme Court, see an opinion known as University of Denver v. Whitlock, 744 P.2d 54 (Colo. 1987)].
There are an infinite number of hypothetical factual circumstances which will drive the determination of what constitutes “reasonable” repair, maintenance or operation of common areas. The only way to distill this analysis in a brief article is to pose two contrasting hypothetical situations. An obvious and high risk is presented if common area sidewalks are not properly shoveled. In contrast, there is usually a very low risk that prairie dogs may burrow in the common areas, develop plague and bite someone. Sidewalks need to be routinely shoveled; yet, associations don’t typically need to hire inspectors to test prairie dogs for plague. A slip and fall from icy conditions is very foreseeable and injury is likely. A plague-infected prairie dog bite is not foreseeable or likely. It is relatively easy, not very expensive and socially useful for sidewalks to be shoveled and snow melt applied. It is not burdensome or difficult to take preventative measures such as shoveling to avoid injuries, especially where an association has assessment funding to do so. Absent some unusual facts, it would be very burdensome and expensive for an association to trap and test prairie dogs for plague. (In certain instances, it may not be so burdensome or expensive if prairie dogs are prevalent, plague has been reported and many people use the areas where the prairie dogs are located.)
The purpose of these examples is to highlight how factually dependent a determination is as to whether responsibility or duty has been satisfied by reasonable conduct under similar circumstances. There is no cookie-cutter approach or specific result for all situations. Also, these considerations apply only to the association’s common areas and elements. The analysis differs for incidents occurring on public property or within a unit.
Public policy and logical considerations may limit or expand an association’s responsibility. For example, it does not make sense to allow associations to escape or avoid liability for injuries sustained on common areas over which the association has exclusive control. On the other hand, an association is not a guarantor that every conceivable risk will be eliminated. One has to measure the comparative burden upon association finances and administrative responsibility, compared to consequences of a failure to do so. One needs to consider the feasibility of an association assessing, budgeting and implementing various risk reduction measures.
An example here would be the relative ease and low expense of putting fencing around a steeply sloping drainage ditch, or installing a light in a particularly dark portion of a common area walkway. These are inexpensive, remedial strategies which can prevent foreseeable harm. On the other hand, if an association is located in a rural area with a low crime rate, the association should not be required to have continuous security guard service.
There are many risk management strategies which associations can implement. These include risk identification, risk assessment, risk minimization, risk removal and risk shifting. Risk identification includes a review of governing documents for provisions imposing specific responsibilities. Risk identification also includes a review of property features such as water, drainage, snow and ice accumulations, steep slopes, shady areas, obvious hazards, recreational facilities and security/crime issues. Consider prior history, recurring issues, similar incidents and previous complaints. Analyze the community as a whole; conduct a safety survey.
Risk assessment and analysis involves an objective determination of: the likelihood of a given risk, the level of danger presented by a given feature, condition or activity, and the possible resulting harm Estimate or predict the likely frequency of an adverse event, the magnitude of harm and the cost to reduce or eliminate the danger.
Risk minimization has many components. Establish and follow policies and procedures for regular inspection of premises. Supervise employees regarding premises liability and security issues. Implement appropriate measures such as posting signs and warnings; modify problem areas, landscaping, lighting, doorways, shrubbery and security features. Consult with appropriate professionals. Some insurance companies will conduct risk surveys as part of their underwriting process. Encourage residents to notify management of problem areas or issues. Promptly investigate, document and preserve evidence of incidents. Risk minimization may involve risk removal. Perhaps the presence of a climbing rope at the playground or a holiday party where liquor is served is simply not worth the risk presented.
Consider risk shifting. This includes contractual indemnification, where the risk is transferred from the association to the vendors sponsoring an event, or the contractor installing a roof. Insurance is a classic risk-shifting contract where, in exchange for payment of premium, the association shifts the financial risk of an adverse consequence to an insurance company. Risk can be shifted by posting warnings or signs, such as a notice that no lifeguards are provided at the pool, or a warning that rattlesnakes may be present in the common areas. If the association is sponsoring an event which could lead to injury such as a field day involving games or a group hike, the association can require participants to sign waiver and release agreements. If there is some sort of accident, proper incident documentation and investigation can also help shift risk. Clear, credible and detailed reports which identify witnesses and conditions can help rebut later claims that an incident was the result of the association’s negligence, when in truth it was some other participant’s irresponsible conduct.
Causation and Damages?
We have addressed the sources of potential duties or responsibilities as well as strategies to identify and reduce risk. We now consider the remaining elements of a claim for premises liability or negligence.
The elements are: (1) the existence of a duty; (2) a violation of that duty; (3) which violation causes; (4) damages for which the law will provide compensation.
The scope of this article allows only a few examples. A claimant will need to prove that the accident caused the ensuing damage. There must be a direct and proximate link between the incident and its consequences. This is a very specific, factually-dependent inquiry. A slip and fall may well cause a broken arm, but it did not cause persistent headaches if the claimant had a previous history of migraines. An injured visitor may be entitled to recover for lost wages for missing work, but the association is likely not responsible for the lack of a promotion if the person was only eligible months after returning to work.
A unit owner may well be entitled to recover for damaged carpet from a water loss which is the association’s fault. But the association is not responsible for mold remediation due to mold which was present in the unit before the flood. The law will compensate for severe emotional distress and mental anguish. The law does not compensate for hurt feelings. A corporation cannot recover for pain and suffering. An individual cannot recover for lost profits for an untested new business. These are just a few examples of the many categories of damages which a claimant may seek as a result of a premises liability or negligence liability claim. Once again, there is no hard and fast rule and the circumstances are factually dependent and often complicated.
The author hopes that this article provides some insight into these types of claims. Please contact the author or other attorneys at Altitude Community Law if you have questions.