Don't Look Under the Gazebo!

By Colin McCarthy, J.D., Robinson & Wood, San Jose, CA

So let's talk American Horror Story and the liability of prior owners for dangerous conditions. Our favorite fun subjects, right? Before things got too silly, there's an episode where [spoiler alert] somebody dies and gets buried under the gazebo. This being a horror show, the victim is not content stay under the gazebo. Said victim gets out and causes all sorts of mayhem, including injuries and some pretty serious property damage. Would you stop throwing stuff around? If you, dear reader, saw a great investment opportunity in this property and bought it nonetheless, would you be liable for this victim's subsequent mayhem on your tenants?

OK, well, let's put it in slightly more realistic terms. Let's say you build a nice fish pond in your back yard, because you like Japanese carp. You get that promotion and transfer across the country and away you go.  You sell the property to Mrs. Investor, who is most definitely going to rent it out. She does, and the new family moves in and their toddler drowns in the pond. Are you, dear reader -- seller -- liable for that wrongful death claim? Come on -- you know the answer. What were we discussing all last year?

Control. Once you sell the property, do you have the ability to go back in and warn the new tenant about the pond? Can you remove it? You think the new owner would like you going on the property with some bulldozers on the grounds that you want to make it safe for her new tenants? I didn't think so. Congrats -- you readers and California law are in accord!  The California Supreme Court in Preston v. Goldman said there was no liability. The main issue was, as usual, control. The seller, even though he installed the pond, had no right to control the danger related to it once he sold it. He could not remove the pond, fence it off, warn about it, or control who came onto the property.

The situation might be different if this were some kind of special, hidden carp pond that you, dear reader, forgot to disclose to the purchaser. Or if you installed a garden cover that was camouflaged and did not tell the owner how to access it, or some other hidden danger that led to the death. Then you might be liable if the buyer would not discover it under most circumstances, i.e., if the seller could discover the hidden carp pond with a reasonable inspection, you would be off the hook.

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