"We've been sued!!!" The three most dreaded words

If you own a vacation rental, there is a small – yet still decent – chance that you will be sued by a guest at some point over the years. Accidents can and do happen in and around vacation rentals. Over the years, I have heard of the following in the Smoky Mountains, a couple of which have been on properties that we own or manage:

• Drownings or permanent injury in pools, ponds, rivers, and lakes
• Injury or death from falls – down hills, cliffs, stairs, and from decks
• Injury and even death from bee, wasp, and yellow jacket stings
• Injuries from burns from appliances, fireplaces, and firepits
• Serious injury requiring back surgeries from a fall from a tree swing that snapped
• A pool table that collapsed, severing a finger.

The list can go on and go, only limited by one’s imagination. One might look at these and say “Well gee, I don’t have any control over bees.” However, a plaintiff attorney might feel very different. Were you aware of a hive developing near your front porch? Did you periodically inspect the house to ensure there were no pests building nests? Did your management company alert you, but you refused to pay extra to allow them to resolve the issue, or delay it until you had some extra cash?

If a guest sustains injury or death on your property, you are likely going to be sued. That’s just the way it is. The question that a jury will decide is, are you negligent? And if you are negligent, were you in fact grossly negligent? And why does it matter?

Negligence is really just carelessness. You failed to check and see if a beehive was forming. You didn’t notice that a wood stair was beginning to crack. If you are found guilty of negligence, you (or your insurer) will be liable for actual damages. Medical, pain & suffering, etc.

Gross negligence is a lack of care that demonstrates reckless disregard for the safety or lives of others, which is so great it appears to be a conscious violation of other people's rights to safety. If you were made aware of the bee hive by guests and/or your management company, and you still failed to address the matter, that could be considered gross negligence. If you are found guilty of gross negligence, you may be liable for actual damages as well as “punitive” or “exemplary” damages. That is, damages that are intended to punish you. Depending on the state, this can be four times or more than actual damages.

It is important to understand the difference between negligence and gross negligence, because many insurers will deny a claim if you are guilty of gross negligence. You need to be on your game with regard to risk management. Obviously if someone manages your property, the onus is more on them (though not entirely) to look after your property. That is what you pay them for. And they will likely be either the defendant in a lawsuit (ask me how I know), or a co-defendant alongside you.

Work with your property manager, and get their assurance that they are periodically inspecting your property and sending you a report of its condition. If they recommend replacing the hand railing on the front porch, LET THEM FIX IT. If they recommend better door locks on the upstairs deck, LET THEM FIX IT. In other words, DO AS THEY SAY. Not only is your property manager trying to protect you, but ultimately, THEMSELVES.

If you self manage, I will be giving specific recommendations to you in my next blog entry.  Until next time!