What is a land owner’s liability for a nuisance tenant?

Business News | 22 Jun, 2018 |

A landlord is generally not responsible for a nuisance created or maintained by his tenant on a leasehold premises after the landlord transfers possession to the tenant.  There are, however, situations where the law allows a landlord to be held responsible for a tenant’s nuisance.  If the landlord, at the start of a lease or the start of any extension of a lease, either consents to activity or should know that activity will take place on the leasehold that is likely to cause a nuisance, then the landlord may be liable for the tenant’s nuisance.  What the landlord knew or should have known at the beginning of a lease or a lease renewal or extension is often determinative. 

Ralph Harris is a shareholder at Burch & Cracchiolo.

This situation sometimes arises in month-to-month tenancies.  For example, in Klimkowski v. De La Torre, 175 Ariz. 340, 341, 857 P.2d 392, 393 (Ct. App. 1993), Ted Klimkowski’s next door neighbor, John De La Torre, rented space on a month to month basis to a tenant who stored dismantled cars, gas tanks, paint, thinner, and tar paper in and around a storage shed on the property.  Klimkowski saw the tenant’s young children playing with cigarette lighters nearby and reported the situation to De La Torre.  Despite this knowledge, landowner De La Torre continued to lease the property to his tenant on a month to month basis.  About two months later, the shed caught fire and exploded, injuring Klimkowski and his property.  Klimkowski’s nuisance claim against De La Torre was dismissed by the trial court.  But the Arizona Court of Appeals reversed, acknowledging the general rule that a landowner is not liable for his tenant’s acts “in creating or maintaining a nuisance upon the leasehold,” but then concluding that an exception exists “when a landlord renews a lease or relets the premises to the same tenants after the landlord knows or should know the tenants have created a nuisance.”  Despite being made aware of the unsafe condition, De La Torre continued to rent to his tenant on a month to month basis.  Each month to month rental period was a new tenancy which presented an opportunity for De La Torre, as landlord, to terminate the leasehold and/or the nuisance.  Klimkowski’s nuisance theory against the landlord was upheld and allowed to proceed to trial.

Burch & Cracchiolo lawyer Ralph Harris recently settled a case involving a landlord who became responsible for a nuisance created by his tenant.  The names of the parties and some of the details of that case have been changed: “Client Cal” owned 50 acres of vacant land in northwest Phoenix, and his next door neighbor, “Sneaky Sam,” owned the 25 acres immediately to the north.  “Sneaky Sam” sold his 25 acres to “Unfortunate Ed” for $4 million, and leased the property back on a month to month basis, and also received an option from Unfortunate Ed to repurchase the 25 acres.  In short, Sneaky Sam raised $4 million yet still remained on his 25 acres as a tenant by paying month to month rent to Unfortunate Ed until such time as Sneaky Sam could repurchase the 25 acres.  Sneaky Sam knew large amounts of waste materials were buried under the 25 acres which needed to be dug up and removed before buildings could be constructed there.  Sneaky Sam arranged for “B.K. Inc.” to dig up the waste materials from beneath the 25 acres and dump them on the adjacent 50 acre parcel owned by Client Cal – without telling Client Cal or obtaining his permission.  Client Cal later discovered the waste materials which had been dumped on his property during Sneaky Sam’s month to month tenancy and hired Burch & Cracchiolo.  On behalf of Client Cal, Burch & Cracchiolo developed a strong case that even though it was Sneaky Sam and B.K. Inc. who physically dumped the waste materials on Client Cal’s property, that dumping constituted a nuisance and Unfortunate Ed had failed to exercise any care whatsoever in monitoring his property during the month to month tenancy during which the nuisance was maintained.  Client Cal cited the Klimkowski case and a settlement was reached where Unfortunate Ed was required to pay for most of the cleanup of Client Cal’s property.     

The Rest of the Story.  If you were wondering what happened to Sneaky Sam and B.K. Inc., here is the rest of the story.  B.K. Inc. went out of business and was not named as a defendant in Client Cal’s lawsuit.  Client Cal did name Sneaky Sam as a defendant, but Sneaky Sam steadfastly professed his innocence and attempted to blame B.K. Inc. and everyone other than himself for the damages to Client Cal’s property.  However, it has long been held that a “possessor of land” is subject to liability for an actionable nuisance if (a) he knows or has reason to know that activity on the land is causing or will involve an unreasonable risk of causing a nuisance, and (b) he either consents to the activity or fails to exercise reasonable care to prevent the nuisance. Restatement (Second) of Torts (1979) at § 838.  Sneaky Sam was a “possessor” of the 25 acres by virtue of the lease he had with Unfortunate Ed.  Burch & Cracchiolo, on behalf of Client Cal, argued Sneaky Sam knew, or at least had reason to know, that B.K. Inc. was carrying on activity at the 25 acres which was causing or was likely to cause a nuisance and was eventually successful in forcing a settlement requiring Sneaky Sam to pay for the rest of the damage to Client Cal’s Property (with Sneaky Sam still professing his innocence even in the settlement documents requiring him to pay).

One more thing: The reported decision in Klimkowsky does not say what happened once the case was returned to the trial court after the appeal.  It turns out that on remand Klimkowski, who maintained a junk yard himself, went to a jury trial on his nuisance claim.  The jury returned a verdict against Klimkowski and in favor of the defendant next door property owner.

 

Ralph Harris, a shareholder at Burch & Cracchiolo, is a peer review rated AV® Preeminent attorney in Martindale-Hubbell.  Ralph’s practice includes commercial litigation, employment litigation and personal injury litigation, with emphasis on business, commercial and contract related disputes.  He has a particular interest in environmental law issues and has written extensively on the topic.  

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