Condo faces large pond without fence - landlord liability?

Question

I'm looking at a condo to potentially use as LTR that faces a huge pond with no fence.  I hate the idea of renting to tenants with children because of the danger.  If I buy it, there is no practical way I could mitigate the danger by building a fence because of the HOA and the size of the pond.  I guess I would just need to carry very high liability.   Maybe try to put some sort of a liability waiver, or some restriction on children playing outside unsupervised, in the lease which probably wouldn't prevent a lawsuit but would be better than nothing.  Thoughts?

Nathan Gesner · Answer

This is a sign of what's wrong with our society. People have lived around water forever. You know what they did? They told their kids to stay away from the water or (more likely) taught them how to swim.

You can't cushion every sharp edge in the world. Even if you did, you still risk being sued by someone that's allergic to the cushioning material or offended by the color.

Russell Brazil · Answer

Every property in the world is in close proximity to something that will kill us. Yet we all keep living where we do and getting along just fine.

Bo Bond · Answer

Lisa,

Given this is a condo unit, then there are also likely many other condo owners around you.  Very likely none of you own, maintain, or are responsible for insuring that pond per the governing documents of the association.  In some states, the nearby pond isn't even owned by the community association, but the state/county.  A pond shouldn't be confused with pool laws and requirements.  These are very differently exposures in many ways, and almost always held to very different standards.

In most cases, your condo associations have $1M/$2M OR $2M/$4M limits of liability in place as an association.  This liability coverage automatically extends to the owners within the association.  Depending on your state/area and how litigious it tends to be, this is usually enough limit for most communities with a single pond exposure.  However, community associations in the more litigious states/areas should at least consider an umbrella policy that provides another $1M-$5M in coverage to protect the community and it's members.  This responsibility falls on the community's board of directors.  The cost is typically minimal, but many times the BOD (and community members) can be fixated on their budget, and look past important coverage extensions like an umbrella.  You and other members can push for this if you feels it's in the best interest of the community, but at the end of the day, the BOD makes the final decision on behalf of the community.  You can also request the board put up signs that caution residents and members, petition the board to put up a fence, etc.  In my opinion, in most areas of the country, as long as the community has at least $1M/$2M in coverage for liability, then I think you should feel pretty safe investing in this property.  Below is what I would tell my board/clients back when I wrote a lot of insurance for condo associations.  This might help analyze your opportunity even further.  Good luck!  Hope this helps!

Main criteria for a BOD to more strongly consider umbrella coverage OR excess limits of liability:

* Does the community allow any activities on the pond (fishing, swimming, boating, etc.)?  More activity = more exposures

* How many owners/units are in the condo community (20 or 200+)?  More people = more exposures

* How affluent is the community?  More money = more ability to sue

* How litigious is the city/state/area?  More litigious = more people are prone to file suit

* Besides the pond, does the community have a pool, playground, gym, sports courts, etc.?  The more amenities you have = more exposures

* Does the community have more than one pond?  More ponds = more exposures

Bjorn Ahlblad · Answer

I would carry sufficient liability umbrella to cover your assets regardless of a specific occurrence. With our system anyone can be named at any time. So in this case HOA, LL, anyone else with money. A liability umbrella covers you all the time. @Chris Seveney   Idea about the door alarm is excellent. Nips the event in the bud; hopefully preventing a problem in the first place.

Sergey A. Petrov · Answer

It sounds you don’t own the pond. Where does your liability come from? Would you fully fence in a single family home with barb wire, motion sensors, and alarms just to make sure kids or grown ups who had a few too many drinks in the evening don’t run out onto the street and get run over by a bus? I suppose one better stay away from investing in properties that have railroad tracks in a 5 mile radius?

You are overthinking it.

Bill B. · Answer

I wonder what people in Florida do when there’s not only an unfenced pond in the community yard. But an alligator infested unfenced pond in the community yard.

Get the door alarm and the umbrella policy (which you should already have unless you have nothing.) and maybe throw a warning in the lease about guardians of children and adults that can’t swim should be wary of the community pond. You might look at it and see that it’s less than a foot deep for quite some distance from the shore?

Chris Seveney · Answer

@Lisa Barnes

Few missing  items - is the pond on hoa property ?

How far is the pond from the door?

To me, This is no different in my mind to having a kid run out into the street. You could setup an alarm on the door that leads to the pond like they have for people with swimming pools - so if the door is open it sets off an alarm so a parent with kids would know the door was opened.

Sergey A. Petrov · Answer

@Bo Bond gets it right again! I’ve administered a lot a lot of claims for my clients over the years. Some smaller ones under $100k, some big ones into millions. There have been many times when I wished I had someone knowledgeable on the insurance side to work with so I didn’t have to educate them on their job!

Mary Smith · Answer

It does not sound like a liability issue to me. You can put in a clause in the lease if you'd like, but it's not particularly a hazard.

Condo faces large pond without fence - landlord liability?

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