Are Real-Estate Agents and Brokers Liable for Injuries Sustained During an Open House?
In a recent case involving an issue of first impression in Georgia, the Court of Appeals was asked whether real estate brokers or agents can be held responsible for injuries sustained by a visitor on property listed and shown for sale.
Background
In October 2019, the plaintiff and his wife, along with their younger son, accompanied their older son to view a home that he was considering buying. At the time, the older son was working with the real estate agent to identify a home for purchase.
The group arrived at the home in Covington to meet the real estate agent and began walking through the rooms of the vacant house. The real estate agent hadn’t previously visited the property, and the listing agent wasn’t at the showing.
While exploring the home on her own, the plaintiff’s wife—who was 73 years old and using a cane—missed a step leading from a hallway down into a room that previously served as a garage. The others heard the noise of her fall and rushed to see what happened. They found the her sitting up, bleeding from her right temple. She them she’d fallen after stepping into the room and hit her head on the floor. The step down from the hallway into the room appeared to be level with the floor in the room, and she hadn’t seen the step before trying to enter the room.
The wife was able to communicate and walk back to their car, and the family drove her to the ER. Once there, she was taken for an MRI, but after this while she was being transferred into a chair, she slipped into a coma. She was transferred to the trauma center at Grady Memorial Hospital due to bleeding in her brain. She never awoke from the coma, and passed away about two weeks later.
The husband filed suit against the defendants, bringing claims on behalf of his wife’s estate to recover medical and funeral expenses on the basis of their negligence, as well as for loss of consortium. The defendants filed a motion for summary judgment, asserting the following:
- The plaintiff’s claims failed as a matter of fact and law because they weren’t owners or occupiers of the property;
- The plaintiff and his family were licensees, rather than invitees;
- The property owner had nondelegable statutory duties;
- The listing agent was an independent contractor and not an employee of the brokerage; and
- The real estate agent wasn’t involved with the listing of the property.
The trial court granted summary judgment in favor of the defendants in a brief order, which included no explanation as to its reasoning. The plaintiff appealed.
Are Real-Estate Agents and Brokers Exempt from O.C.G.A. § 51-3-1 as a Matter of Law?
Presiding Judge Stephen Dillard and the Court of Appeals agreed with the trial court that in this particular case, neither the broker nor the agents were occupiers of the subject property so as to make them liable under the statute.
In a cause of action based on negligence, the plaintiff bears the burden of establishing four essential elements:
- A legal duty to conform to a standard of conduct raised by the law for the protection of others against unreasonable risks of harm;
- A breach of this standard;
- A legally attributable causal connection between the conduct and the resulting injury; and,
- Some loss or damage flowing to the plaintiff’s legally protected interest as a result of the alleged breach of the legal duty.
The defendants argued that they didn’t owe a legal duty to the plaintiff’s wife given the circumstances here, and thus, they couldn’t be liable for negligence. Judge Dillard explained that it’s well established that the “existence of a legal duty, which can arise by statute or be imposed by decisional law, is a question of law for the court.” The question here was whether the defendants owed a duty of care to the plaintiff’s wife under O.C.G.A. § 51-3-1, which provides that “a person who owns or occupies land and by express or implied invitation, induces or leads others to come upon his premises for any lawful purpose, is liable in damages to such persons for injuries caused by his failure to exercise ordinary care in keeping the premises and approaches safe.”
The Court’s analysis began with the terms of a listing agreement. The seller entered into a contract with the listing agent on behalf of the brokerage to list the house for sale. The agreement indicated that any affiliated licensees who helped market or sell the property would be independent contractors—thus creating an independent-contractor relationship between the seller and the brokerage. Importantly, the agreement between the seller and the brokerage included a provision regarding “hazardous conditions on [the] property,” which provided as follows:
[the seller] acknowledges that [it] owes a duty of reasonable care to keep the Property safe for prospective buyers and their agents who view and inspect the Property. Among other things, this includes a duty to warn such invitees of dangerous conditions that would not be obvious to an invitee. [the seller is] encouraged to inspect the Property for hazardous conditions and correct and eliminate all such conditions. [the seller] agrees to indemnify and hold [the brokerage] harmless from and against any and all claims, causes of action, suits, and damages arising out of or relating to a person or persons being injured or harmed while on the Property.
The contract further placed “limits [on] the broker’s authority and responsibility” by specifying that the brokerage would “be held harmless by [the seller] for any and all claims, causes of action, or damages arising out of or relating to … [the seller’s] negligence …; and any damages or injuries occurring on the Property as a result of dangerous or defective conditions on the Property … .” Finally, the agreement specified that the brokerage would not “have any authority on behalf of [the seller] other than what is set forth” in the contract.
So, while it was true the seller vacated the property and no one was living there during the listing period, there was no evidence that the brokerage or the listing agent undertook any obligation to exert some measure of control over the premises in the owner’s absence beyond that of marketing the property for sale and allowing entry to potential buyers. Moreover, the listing agreement didn’t delegate to the brokerage—or to any real estate agent—a duty to maintain the property, make repairs, or otherwise relieve the seller of its duties as the property owner, notwithstanding that the seller was not currently inhabiting the home. Instead, the contract encouraged the seller “to inspect the Property for hazardous conditions and correct and eliminate all such conditions,” and in no way suggested that the brokerage or any agent were responsible for these actions.
Thus, it was clear by its terms that the relevant contract merely established an exclusive listing agreement by which the listing agent and the brokerage were tasked with marketing the home for sale. And even in that limited role, the listing agent needed the property owner’s consent for certain matters, including the hours during which the property could be shown. As a result, under the terms of the contract between the seller and the brokerage (and, by extension, the listing agent), neither the brokerage nor the real-estate agents involved were given control over the premises such that they could be considered occupiers who owed a duty under O.C.G.A. § 51-3-1.
But even beyond the listing agreement, there was no evidence that the brokerage, the listing agent, or the real estate agent exerted control over the property such that they could possibly be considered occupiers. To be sure, this is a novel question under Georgia law, Judge Dillard wrote. Even so, there are “open house” cases from other jurisdictions where appellate courts have concluded that a genuine issue of material fact existed as to the degree of control exercised over a property by a broker or agent when an injury occurred during an open house hosted by a listing agent. Significantly, during such events,
the broker receives very tangible economic benefits from the relationship with the potential buyers who visit the home. The open house enables the broker to sell the house and to earn a commission. Also, . . . an open house presents a broker with an opportunity to meet and cultivate future clients. More generally, the broker can discuss other listings with visitors and thus promote his or her individual business interests. Thus, the economic benefit that a broker obtains from staging an open house extend[s] beyond the potential sale of the particular property.
Additionally, at an open house, potential buyers “may reasonably expect that the broker [or agent] will be familiar with the premises and would rely on the broker’s presumed familiarity with the house, including a knowledge of all of its important features and physical characteristics,” the judge wrote quoting a New Jersey case. And such factors would ordinarily include matters relating to home safety such as “fire or burglar alarms, locks, and the like, and, contrastingly, defects like broken steps, exposed electrical wiring, and missing or weak railings.”
But in this case, the Court wasn’t faced with the potential liability of a broker or agent arising from an injury occurring during an open house. Nevertheless, the Court of Appeals found the reasoning of the cases from other jurisdictions instructive because the circumstances surrounding an open house stand in stark contrast to those presented here. It was undisputed that the plaintiff’s wife was injured during a routine showing of the property by a buyer’s agent who hadn’t previously visited the property and who wasn’t accompanied by the listing agent. As a result, in the absence of a contractual obligation delegated from the seller to the brokerage or the listing agent, as well as the absence of any facts beyond those of a routine showing during which the only agent present was there representing a potential buyer, there was no genuine issue of material fact by which a jury could consider the brokerage, the listing agent, or the real estate agent to be an occupier of the land for purposes of O.C.G.A. § 51-3-1. Likewise, contrary to the plaintiff’s assertions, the Court didn’t conclude the broker or agents were “possessors” of the land.
The Court of Appeals stressed that it didn’t hold that real-estate brokers and agents can never be considered occupiers of land for purposes of O.C.G.A. § 51-3-1, nor did their holding reach the question of whether, and under what circumstances, a broker or real-estate agent may be held liable for an injury occurring during an open house. Instead, the Court merely hold that, in this particular case, the plaintiff cannot establish the defendants owed a duty of care under these circumstances, and summary judgment was properly granted in favor of the brokerage, the listing agent, and the real estate agent.
As a result, the Court of Appeals affirmed the trial court’s granting of the defendants’ motion. Kidd v. Metro Brokers, Inc., Inc., 2024 Ga. App. LEXIS 329 (August 8, 2024).
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