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Wednesday, November 5, 2014

Terrorist Attacks and Landlord Liability

This article briefly discusses the responsibility of commercial property owners for the safety of tenants and building invitees in the event of a terrorist attack.

If a person injured as a result of a terrorist attack at the owner’s property sues the landlord, we expect that the Courts will rely on the general body of “premises liability” case law to decide the lawsuit.  The very general rule espoused by the majority of Courts in the United States is that commercial property owners do not have a duty to protect tenants and invitees from the criminal acts of third parties.  The general exception to the rule is that if imminent harm is foreseeable to the owner, and the owner does not take reasonable steps to warn or protect tenants and invitees of the harm, the owner can be held liable.

These general principles were espoused in the case of Jane Doe v. Dominion Bank of Washington (U.S. Court of Appeals for the District of Columbia), where the Court stated as follows: “A commercial landlord must exercise reasonable care to protect tenants from foreseeable criminal conduct occurring in common areas under the landlord’s control”. The Court further stated that: “D.C. law imposes a heightened standard of foreseeability on plaintiffs seeking to hold a landlord liable for injuries resulting from a criminal act.”  In that case, a rape victim was allowed to proceed with her case because the court found deficient building security in a building where numerous assaults and crimes had taken place. Similarly, in Thompson v. Skate America, the Supreme Court of Virginia allowed the plaintiff to proceed with his case against the owner of a skating rink based on the allegation that the owner failed to protect invitees from the criminal acts of an individual that the owner knew was a menace to patrons of the skating rink (and had been ejected from the rink on prior occasions). 

Given the fact that large-scale terrorist attacks by their very nature are not predictable, we do not expect that commercial property owners will be held liable for injuries and property losses to tenants and invitees just because the injuries/losses occur on the owner’s property (although every case is different and will be decided on its own merits).  Rather, individuals and families will need to look to insurance companies, government funds and charitable organizations for compensation, as was the case in the wake of the 9/11 attacks (See http://www.rand.org/pubs/research_briefs/RB9087/index1.html). 

This raises the question:  What should commercial property owners do to limit potential liability? The first thing the owner can do is review its insurance policies to determine whether the owner is covered from terrorist attacks.  Many policies specifically exclude terrorism.  The second thing the owner should do is review its emergency preparedness plan for the building with its property managers and tenants. The plan should not address terrorism specifically, but rather, should provide general guidance to property managers and tenants regarding notification and evacuation in the event of an emergency or other imminent harm to the building or its occupants (including terrorist attacks). The existence of such a plan and the adherence to the plan in the event of an emergency could improve the landlord’s position if the landlord is sued for negligence following a terrorist attack.  Finally, the landlord may want to consult with a security firm regarding the building’s exposure to criminal activity and determine whether simple measures could be installed to deter such activity (such as installing cameras or additional locks).

In short, taking action to specifically prevent terrorist acts may in many cases be counterproductive and is not required by law, but planning for general emergencies (including terrorist acts) may limit the property owner’s exposure to liability.