Vacation Rentals: Liability of the Owner for Injury Suffered by the Renter

With the explosion of the “private” rental business wherein residential property owners rent their house or condo on a short-term basis to third-parties, certain legal issues have arisen with regard to the duties owed by the property owner to the renter.

 A recent Virginia Supreme Court case, Haynes-Garrett v. Dunn, 818 S.E.2d 798 (Va. 2018), addressed that issue. In that case, the property owners owned a rental house in Virginia Beach. The property was not the owners’ main residence, but rather a vacation home that was sometimes used by the owners, but mostly used as a rental. The issue addressed by the court was whether – for the purpose of evaluating the owners’ duty of care to the renter – the relationship should be classified as a “landlord-tenant” relationship or an “innkeeper-guest” relationship. This classification was important because the duties of the owner to the renter were significantly different depending on the category. In the landlord-tenant arena, under Virginia law, the landlord has no duty to maintain the property in a safe condition because the property is deemed to be under the tenant’s exclusive control. (An exception being concealment or fraud by the landlord as to some defect in the premises that is known to the landlord but unknown to the tenant.) Assuming that exception does not apply, the tenant takes the premises in whatever condition they may be in, thus assuming all risk of personal injury from defects or dangerous conditions.

 In contrast, an innkeeper is subject to an elevated duty of care, whereunder the responsibility for keeping the premises safe is primarily on the innkeeper, and the guests are entitled to assume that the premises are safe. The innkeeper owes a duty to take every reasonable precaution to protect the guests from injury.

 The Virginia court resolved the issue by primarily focusing on the degree of control the owners had over possession of the property during the rental period. Based on the evidence presented, the court found that the owner had no right to enter the premises during the tenancy, and therefore the situation was more akin to a landlord-tenant relationship than an innkeeper-guest relationship. As such, the court held that the owners’ duty to the renter was of the lesser variety.

 Lessons learned: This case reinforces the idea that the property owner should have appropriate disclaimers of liability and responsibility in the rental documentation. In the absence of that, the owner is exposed to a court’s after-the-fact determination of the scope of the owner’s duty to the renter.