By: Louis G. Adolfsen and Michael F. Panayotou
In Xiang Fu He v. Troon Management, Inc., et al. decided on October 24, 2019, the New York Court of Appeals held that section 7-210 of the Administrative Code of the City of New York "unambiguously imposes a nondelegable duty on certain real property owners to maintain City sidewalks abutting their land in a reasonably safe condition." In Xiang Fu He the issue in the case was whether or not the owner was responsible for an injury resulting from snow and ice on the abutting city-owned property.
When the case was before the Trial Court, the Judge denied summary judgment to defendants. The Appellate Division, First Department, unanimously reversed on the law. The Appellate Division's decision stated:
"Defendants cannot be held liable for injuries allegedly sustained by plaintiff when he slipped on snow and ice on the sidewalk adjacent to their property, because they were out-of-possession landlords with no contractual obligation to keep the sidewalks clear of snow and ice, and the presence of snow and ice does not constitute a significant structural or design defect..."
At first blush, this decision seems to prohibit landlords generally from avoiding liability for an injury that does not arise from a structural or design defect on the property, such as snow and ice, by entering into a "Triple Net Lease", which generally states that the out-of-possession landlord has no duty to maintain or repair the property and that the tenant is delegated this duty. However, the Court's decision is not that an out-of-possession landlord cannot in all cases contract away liability for such injuries but that the landlord's ability to avoid liability may be prohibited by statute.
Absent a statute, the general rule remains that a landlord has no liability to maintain or repair property under a Triple Net Lease where the liability arises from e.g., the presence of snow and ice, and not from a structural or design defect. What the Xiang Fu He decision is saying is that by statute the legislature of a city or state or any other administrative municipal body can impose liability on an owner and prevent the owner from avoiding that liability, even if the owner has delegated the duty to keep the property free of snow and ice, to a tenant under a Triple Net Lease. Indeed, the Court of Appeals made this clear when it stated:
"...to be clear, nothing in section 7-210 prevents a landowner from entering into a maintenance agreement with tenants and third parties. While an owner can shift the work of maintaining the sidewalk to another, the owner cannot shift the duty, nor exposure and liability for injuries caused by negligent maintenance, imposed under section 7-210."
One may ask why this decision is so significant to the plaintiff if the City remains liable for the injuries on the sidewalk even if the landlord has liability. From the plaintiff's point of view, having the landlord or owner of the property as a direct defendant is important. While a tenant will be liable under the traditional rule where an out-of-possession landlord has delegated the duty of maintenance of conditions such as snow and ice to the tenant, the tenant may surely not be as substantial a defendant as the owner of the property itself. While both the owner and the tenant may maintain insurance, the plaintiff has the added protection of the property itself as a means for recovering. The City, it should come as no surprise, is not as quick to resolve cases and does not have the incentive that a landlord's insurance company would have to resolve the case. Thus, as with so many things in the law, the underlying rationale for why one wants to impose liability on a party is often based on that party's financial status and its insurance.
For the time being, the rule stated by the Appellate Division, that an out-of-possession landlord with no duty to maintain the property is responsible only for structural defects should still survive. The teaching of the Xiang Fu He case is that the limitation of liability can be changed by statute.