Aurora Loan Services owned a foreclosed residence in Lafayette and retained Rockville Realty as the listing broker. The home had an attic that was converted into a “bonus room” with a pull-down stairway ladder hinged with metal brackets. Hall, a real estate agent showing the home to a prospective buyer, fell and was injured when the hinge broke.
The home had previously been inspected by a licensed contractor who prepared an estimate of repairs that was provided to the listing agent. Under a heading entitled “Health and Safety Required Repairs-Group 1”, the report listed both cosmetic or minor items along with health and safety items. One item on the list was “Stair-remove and replace attic stair”. During Hall’s visit with her client, a copy of the report was on the kitchen counter.
Hall and her husband sued the owner and listing agent for negligence, premises liability and loss of consortium. The trial court (Contra Costa County, Judge Judith Craddick) entered summary judgment for defendants, agreeing they did not have notice of a defective condition. The Court of Appeal (First Appellate District) reversed, finding there were triable issues of fact regarding whether defendants had actual or constructive knowledge of a concealed dangerous condition and satisfied their duty to notify plaintiff.
The court began by discussing the legal responsibilities imposed on real estate agents and property owners, and the legal relationship between them, which is governed by both contract and agency law. Owners must maintain their properties in reasonably safe condition and use ordinary care to prevent injury to others. For liability to attach, the owner must have actual or constructive notice of a defective condition. Agents owe a duty of care to all persons within the area of foreseeable risk. Liability is determined by whether a reasonable person would have foreseen a risk of harm and whether the agent exercised ordinary care under the circumstances. The conduct of and information known to the agent is imputed to the property owner.
Relying on these legal principles as well as two decades-old cases addressing the specific issue, the Court of Appeal held that a real estate agent has a duty to notify visitors of marketed property of concealed dangerous conditions of which the agent has actual or constructive knowledge. Any such knowledge and resulting liability are imputed to the property owner.
Here, the inspection report suggested at least a possibility that the stairway ladder was in disrepair, yet there was no indication that the listing agent followed up with the inspector to inquire about its safety. Even though the inspector later testified at his deposition that he could not recall a specific danger, a jury could still conclude that a reasonable person who received the report might have believed the stairway needed to be replaced. As such, there were triable issues of fact regarding whether defendants had actual or constructive knowledge of the dangerous condition of the stairway ladder and satisfied their duty to notify Hall.
Hall v. Aurora Loan Services (2013) 215 Cal.App.4th 1134