The legal liability of a Managing Agent in respect to repairs and maintenance to a property the subject of a Management Agreement, has been recently highlighted in a decision of the New South Wales Court of Appeal.
The court at first instance found that by reason of a Management Agreement entered into between a Managing Agent and the owner of a property, the Managing Agent accepted a delegation and authority to arrange repairs and maintenance in accordance with the owners’ obligations to repair the property.
On that basis the Managing Agent owed a duty to exercise reasonable care in maintaining the premises.
As a result of the court finding that the Managing Agent, in failing to properly carry out the Managing Agent’s obligations, on behalf of the owner, to maintain and repair the property, the Managing Agent was held to be liable in negligence to persons who were injured as a result of the collapse of a balcony forming part of the building on the property, the subject of the Management Agreement.
The balcony in question had been the subject of complaints by the tenants and had also been the subject of comments made by persons quoting for repairs to the balcony, which quotes, indicated that the balcony was rotting and that repairs being undertaken could only be considered a temporary measure.
Whilst the Managing Agent arranged for someone to inspect the balcony it was held that the person engaged by the Managing Agent firstly did not have the expertise, and secondly was not retained by the Managing Agent to advise on the structural adequacy of the balcony.
Whilst the Court of Appeal held that the owners ought also to accept a portion of the liability, the Court of Appeal also held that the primary decision was correct in finding that the owners were entitled to a contractual indemnity from the Managing Agent in respect of the owners liability to the tenant and the persons who were injured upon the failure of the balcony.
Whilst the decision also addressed a number of issues in addition to the liability of the Managing Agent, the case highlights the responsibility and liability that can be imposed upon a Managing Agent of a property for the repair and maintenance of that property and the liability for injury which may be sustained as a result of the failure of part of the physical structure forming part of the property, particularly in circumstances where the Managing Agent had been advised by both the tenants and other contractors of concerns regarding, in this case, a balcony.