Liability question... Thoughts?

Parent Cafe
1

I know that no one here can answer in an official capacity, but I wonder if my liability concerns are off-base or crazy. If I’m worrying about nothing, I’ll shut up.

I own condos in a complex that also manages long-term leases (the management corp is based in Texas, but the property is in Alabama. This company has only managed the property for about a year, and I don’t think they are familiar with AL laws. For instance, until I told the complex manager that in Alabama, a person is not an adult until age 19, he didn’t know that and had been letting 18 year olds sign lease contracts without parents. Alabama is one of the few states - may be the only state - that has age 19 as the age of majority))

Here’s the background.

Complex has hosted 2-3 publicly advertised pool parties in order to attract new leases.

Each of these parties has been extremely well-attended by young people…crowded pool decks and crowded in the pools…the complex is upscale and very nice.

No lifeguards or security people are present during these times, only a few complex employees are present. (Correction, one time they had security, but then deemed them to be an unnecessary expense for future parties)

Food, soft drinks, and music is provided, along with the pools, etc.

Prospective Lessees (many/most who are under 21) come to these events. Many bring beer and it is not hidden in the least.

The “only” concern of the mgmt company seems to be “glass bottles”. Beer in cans, mini-kegs, etc are acceptable (again, not supplied by complex).

Nothing is done to determine if any of these “guests” are under 21 and drinking. There are laws specific to underage drinking in Alabama

There is also no concern that anyone of any age is drinking and then driving.

When I confronted the property manager that these parties were exposing the property/owners to a lawsuit if anyone (particularly someone under 21) left these parties and got into a car accident. The mgr insisted that I was worrying about nothing because A) they weren’t supplying the alcohol. B) it’s a public area (which I then countered with “pick your poison…if it’s public, then no one can drink in public here, if it’s private, then someone can be held responsible.” )

the one thing he kept hanging his hat on is that “an accident has never happened and they’ve never been sued before.” lol. I wonder how many companies have said THAT before they were hit with a big ole lawsuit…and later found liable?

I also told him that nothing was being done to prevent underage drinking. And he agreed that they did nothing to determine the ages of those who were openly drinking. (Beer pong was being played and some mini-kegs were clearly visible, so there would be no way to argue that mgmt wasn’t aware of the drinking, and possible/likely drinking by underage people).

I’m guessing that if the police were called during this time, all the under 21 drinking kids would be cited. I don’t know if the property would be cited for anything.

There hasn’t been any outrageous behaviors (no fights, etc), but I’ve noticed in nationwide reports in college towns that when drinking young folks end up fighting, it’s often over “over a girl” …and with many bikini’d beauties around a pool, the possibility exists that some intoxicated guy might take offense at a comment or action by another intoxicated guy. (I don’t mean to sound sexist, but literally every time I read online about fights at events like this, it’s nearly always intoxicated guys fighting over some girl. But, I’m sure that there are times when girls fight over boys…lol.)

Side issues, but not completely unrelated…

I also pointed out that these young folks (mostly college students ) can’t qualify and need guarantors of the rent (rent is high here), so hosting these parties when parents aren’t there to sign/guarantee rent is a bit short-sighted…kids just coming for free food and a party…lol.

The mgr said that he has these kids sign leases, and then it’s their responsible to get the guarantor, but if they can’t get the guarantor, then they aren’t allowed to move in BUT HE will still collect the rent for a year. (I question how legal that is since I thought a contact can’t be valid/enforced if (in this case) the landlord won’t let the contract holder ever move in. It’s not as if the signer is guilty of fraud, which would be a different situation.) I would think that the demand that a guarantor signature be provided would void the contract if one could not be provided. Maybe deposit would be lost, but I can’t see how rent could be collected when refusing to let them move in. (And , of course, he doesn’t have valid contracts with any 18 year olds where a parent hasn’t also signed, since 18 year olds are still minors in this state.)

I don’t know if a complex pool area falls under a “public area” or private area. I’m guessing that it’s a private area because it’s private property and not “open to the public”. I believe that in this city and state, “public drinking” is very controlled (permits, etc), and you can’t just be out in public drinking. And of course, public drunkenness is not permitted either.

Maybe I’m just a nervous old lady, but I just don’t think these parties are wise and are exposing the complex to a potential lawsuit.

Thoughts? (again, I understand that no one can answer in an official capacity.)

2

Your concerns are very valid and the manager is an idiot.

3

I’d have this raised with the Board of Directors at your complex. Your concerns are indeed valid issues. A pool in a complex is on private property and the landowner/complex/Association can be potentially sued for actions which occur there–underaged drinking, fights, drowning, etc. The management company sounds VERY cavalier and not one I’d have much confidence in. I prefer in-state property management companies to massive out of state ones.

I’d suspect the insurance carrier for the complex would NOT like these parties to be occurring.

4

The manager is insane, or some kind of mafia.

5

Agree that you have valid concerns.

It might be worth it for peace of mind to run the scenario by an insurance defense attorney in AL, and/or send a certified letter to the CEO and general counsel of the management corporation outlining your concerns.

Separately, do you carry a personal liability umbrella policy?

6

Valid. Although social host laws can/usually require the provision of alcohol I think some have gotten broader to get around the youngsters just bringing their own. Also, criminal liability is different than civil liability which is more certainly the biggest risk here.

7

I don’t think my state requires that the host provides. I will check on that.

@gnocchi yes, I do…a multi-million dollar policy.

8

Do you have a homeowners association in the condo complex? Might be advisable for an officer of the condo association to write to the head of the parent management company in Texas with all of this information and asking that it be stopped immediately. They may have no clue what this idiot is doing to increase rentals in the complex (which is clearly all he cares about). With the information in writing to the parent company, I think it becomes a “known hazard” (or something similar) , and if something does happen, the HOA has documented these scenarios and its concerns, and the liability becomes the management company’s. This is an opinion, based on some peripheral legal knowledge, so don’t hang your hat on it. But contacting the parent company seems a wise next step. I’ll bet either the parties and contractual illegalities will stop, he’ll be gone, or both.

9

We have an insurance agent, so she’s always checking our policies and coverages, to try to be sure we don’t have gaps and that our insurers will work with her and us if we need to make any claims. Her firm charges a minimal $50 or $100 per policy rather than a commission. She is worth it for peace of mind to us.

10

I would add that if I lived in the complex I’d be pretty upset about management hosting publicly advertised poor parties. What if I wanted to use the pool?

11

We contact our insurance broker whenever we have liability questions. If it’s a big enough issue, the broker contacts an attorney they have on retainer.

12

If you have a HOA, check the bylaws. Wouldn’t the owners of the units being managed have to follow those? Wonder if the unit owners even know this garbage is going on. And can you send a cease and desist letter to the management company?

13

There could be both criminal and civil liability here. They cannot claim this to be a ‘public’ space, the pools are on their land, and they are the ones throwing the party, so it isn’t like, for example, people at a public park. Whether they serve alcohol, or they de facto allow drinking, they are going to be held to the same standard that a homeowner would, or a bar for that matter. Here is the list of potential liabilities I can see, based on what I learned in Business law and from people who deal with these things:

1)the party has little or no security and no lifeguards, when they invited people to come to these parties? I am not a lawyer, but this would almost fall into vicarious liability, for doing something so stupid. Puff Daddy (or whatever he calls himself these days) promoted a ‘rap and basketball’ party at City College that turned into a mess, and spent many years in court defending himself. Even if people signed some sort of waiver, it is meaningless. This wasn’t a tenant having a party for friends (they would likely be not held liable for that, though even there there could be a gray area).

This would be more likely civil liability, the lawyers would swarm all over this. If someone got hurt or died the manager could be arrested for criminal negligence for allowing the party to go on that way.

2)Allowing underage people to drink like that is a big no no, it is the same thing as when a homeowner has a party and kids drink, they are going to go after them for allowing it, especially when they didn’t have any monitoring, they can’t claim they even tried. They could face jail time and massive fines for allowing this.

3)And yes, the owners would be cited in the lawsuits, arguing it was the management company wouldn’t fly, as the owners of record they would be liable. If it is owned through a corporation, they would be liable, if someone was part owner personally, they could be subject to all kinds of liabilities, and could lose literally everything if the ruling is against them in the lawsuit (insurance might not even pick this up, depending on the policy and how it is worded).

Again, for specifics, you would need to talk to a lawyer, but you and the fellow owners have reason to be worried. I realize civil courts work differently in different places, and maybe Alabama law for example might be more forgiving towards the owners and/or limit liability.

For someone to argue they never had problem would be the like the captain of the titanic saying he never had hit an iceberg, so full steam ahead…

14

Our insurance broker is always willing to write a letter stating the liabilities involved. If we don’t listen to the broker’s advice, we could lose our liability insurance coverage. (Not a good idea for structural engineers, who as a group have a high rate of lawsuits filed against them.)

15

Assuming a lawsuit as opposed to an abstract discussion, a plaintiff would want to sue everyone and that means the management corp and whoever owns the common areas - likely but not always the owners association - would likely end up arguing over legal responsibility. My first instinct is that the management company’s contract probably says it is an agent for the owners while the owners would claim these acts are not included in the scope of the contract. I assume owners live in the complex and that would help the management company’s position. I’ve seen pool parties as leasing marketing. If that kind of thing is in the discretion and control of the management company, that would tend to make them liable.

You can look at your deed and condo documents to see if you have an ownership interest in the common areas. You usually would but maybe you don’t; some condos are just inside the walls and some entity owns all the common area.

16

@Wellspring Your point is another very good point. It’s something that also bothered me. When these parties “take over the pools,” with random “guests”, then current tenants have more limited use.

Of course, the mgr would say that current tenants are free to use the pools during these times, but seriously, there is hardly an inch of space.

@jym626 I don’t think most owners know what’s going on. So many do not live in the area. Many own just one and their kids live in it while going to school. One guy owns like 27 condos and he lives OOS. I doubt he knows, but I will contact him since he’s the HOA president (gets to vote himself in with 27 votes…lol). I do have his number and will be contacting him.

@MaineLonghorn I think i need to find out who holds the policy at the complex level. I’m sure that they would not agree to these “marketing parties”. Don’t get me wrong, though. They did have a very calm, no booze, marketing party awhile ago. They brought in a radio station who broadcasted from there, served food, gave away chotskies, etc. That was totally legit and minimal risk. It was held earlier in the day which is why booze was not so present.

@musicprnt >>>For someone to argue they never had problem would be the like the captain of the titanic saying he never had hit an iceberg, so full steam ahead…>>

Lol…so true. and your other points are right as well.

17

How did you find out about these events? Did you happen to be on site or did a tenant tell you?

18

I was told by another owner who is also concerned. @jym626
I just got off the phone with another owner who owns many rentals in various cities. I find out that he had already sent both the onsite mgr and the corporate office certified letters regarding these issues. He was only able to talk for a couple minutes and will be calling me back.

The crazy thing is that the attraction of this property has always been that it’s quiet, gated, upscale, etc. Making it appear to be Party Central to get more leases is short-sighted and damaging.

19

Any chance someone can get photos of the manager handling the beer and serving to minors?