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Is a landlord liable for damages caused by his tenant’s negligence

Is a lessor (landlord) liable for damage negligently caused to third parties by his lessee (tenant)?

The mere possibility that the answer could be ‘yes’ should send chills down the spine of every landlord in the country, particularly those who lease premises on which the tenant engages in activities which can easily give rise to injuries, such as the operation of machinery or the storage of hazardous materials.

The argument that a landlord is liable to a third party in such circumstances was put forward in the widely publicised and tragic case of Neil Katzeff NO v Canal Walk Ltd (Cape High Court, 18 August 2005; not yet reported) which involved an action for damages brought on behalf of a ten year old girl who had suffered serious injuries when driving a hired go-kart on a track located in a well known Cape Town shopping mall. Her long, plaited hair had become entangled in the rear axle of the go-kart.

The injured girl’s father instituted a claim for damages not only against the individual who leased the go-kart track and operated the go-kart hire business, but also against the owner of the premises on which the business was conducted.

It was argued that the lessor of the premises owed a duty to the public

Counsel for the injured girl argued that the owner of the premises, in leasing the premises to the lessor and allowing the latter to operate a go-kart track, owed a duty to the public in general and the injured girl in particular, to ensure that the lessee put in place all reasonable andnecessary safety features and precautions to make sure that anyone
participating in the go-karting would not be injured. It was argued that the owner of the premises ought to have known that go-karting could be dangerous to members of the public who hired the go-karts, that gokarting was an activity which should be supervised by trained personnel and which required safety equipment to ensure that members of the public who hired the go-karts would not get their hair or clothing caught in the axles of the karts.

The court held that there has been no reported judgment in South Africa in which a landlord has been held delictually liable (in other words, liable on the basis of negligence) for failing to ensure that his tenant took precautions to prevent damage to third parties arising from the tenant’s activities. The court declined to hold that there was such liability in the present case. In the result, the tenant who conducted the go-kart leasing business was held liable for the damages suffered by the injured girl.

To be on the safe side, include an appropriate provision in the lease

Nonetheless, it may be wise to include in a lease of commercial or industrial premises, a provision which explicitly states that it is the sole responsibility of the tenant to take all necessary precautions against damage to property or injury to persons occurring on the leased premises. While such a stipulation is binding only between the contracting parties, namely the landlord and the tenant, such a clause would go some way toward pre-empting any argument that the landlord had any obligation to ensure safety on the leased premises.

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