By RICHARD DEGENER Press of A.C. Staff Writer | Saturday, April 10, 2010
A Stone Harbor real estate firm was not responsible for inspecting a rental property or warning a family of potentially dangerous conditions that led a 72-year-old man to fall down steps and injure himself, the New Jersey State Supreme Court has ruled.
Summer rental homes change hands every Saturday along the shore — many of them handled by local Realtors for absentee owners. The Thursday ruling, which did not assess blame, was praised by the real estate industry, which has said it cannot function as building inspectors for the properties its members rent.
But an attorney for the Hackensack, Bergen County, man who was injured said this will not be the last time the state’s highest court will be asked to decide the issue.
The Supreme Court ruling was actually a 3-3 tie with one justice absent. But the deadlock upholds an earlier court ruling favorable to the real estate industry.
“It’s as close as it gets, but certainly I think it’s the right decision,” said Barry S. Goodman, an attorney with the New Jersey Association of Realtors.
The court record indicates that Columbia Reyes rented the Stone Harbor house from Harry and Holly Egners from August 23 through Sept. 6, 2003, for a summer vacation. She paid $4,050 with the real estate firm Prudential Fox getting a commission of $486.
Her father, Hermes, who was 72 at the time, fell when walking from a bedroom onto the back deck. He testified it was the first time during the vacation he went onto the deck and he thought the deck was at the same level as the interior floor.
There was actually a platform 7 inches below the sliding glass door followed by a drop of 6.5 inches from the platform to the deck, the ruling said. Reyes stumbled and then fell down the stairs leading to the backyard. He testified he instinctively grabbed for a handrail, which by code should have been on the stairway, but it was not there.
He spent the next five days in the hospital and his attorney, John J. Novak of Toms River, said Hermes suffered from the back injury until his death on March 23, 2009, although his death was not due to the injuries.
Novak argued the real estate agent should have inspected the rental home and warned the renters about “open, obvious and dangerous conditions” including the lack of a handrail on a back deck and a step that was not marked.
Novak said that with thousands of summer rentals at the shore, he expects his argument to eventually be won. He said Reyes got hurt on his ninth day in the home. He said this was a huge factor in the case. Novak argues that at some point, the real estate agent has liability but then it shifts to a tenant.
“The lasting impact will not be so lasting. Sooner or later, somebody will get hurt at a short-term summer rental from an obvious defect and if it occurs on day 1, 2, 3, 4, 5, 6, 7 or 8 they may get something. We know on the ninth day they won’t get anything,” Novak said.
Novak brought previous case law into the argument, including a 1993 case in which a real estate agent was found liable for injuries suffered at an open house.
Novak argued a summer renter should at least be afforded the protections of prospective home buyers going to an open house.
“How could Columbia Reyes and her father possibly inspect the house?” Novak asked.
Michael T. Kearns, the attorney for Prudential Fox, said such inspections should be made by a building inspector.
“This is a licensed Realtor and not a license building inspector. A Realtor is not trained in the building code,” Kearns said.
The missing handrail is required by local construction code. Kearns said the Egners purchased the house several months earlier and it had been inspected by a building inspector and they were issued a certificate of occupancy.
Novak said the Egners put up a handrail after Reyes fell, and painted a white stripe on the step, which he contended was an admission that it was a liability.
While Stone Harbor is one of the more upscale towns on the shore, Goodman said commissions for a two-week rental are typically $50 to $75.
“If a Realtor is liable for every construction defect and potential problem, then it’s not worth it for the commissions they get,” Goodman said.
Novak counters that rentals are keeping some agencies afloat.
“If there’s not enough money, maybe they shouldn’t be involved with this,” Novak said.
Kearns, Novak and Goodman all agree the 3-3 decision does not really settle the issue. Each case has different facts and there will be more of them, although Goodman said that about 95 percent of such cases get settled out of court.
“The good thing is the law has not been extended, but it still applies to an open house,” Kearns said.
Goodman said if a similar accident happens “in the first 15 minutes” a renter is in the house, the justices could rule differently.
Kearns said losing the case would have stifled the shore rental industry and would surely have added to the cost of the business.
“It would have driven up insurance premiums and the price of rentals,” Kearns said.
Novak said there is still a pending lawsuit against the Egners, who have since demolished the house, and it will be a jury trial. This suit will not include Prudential Fox.
“The damages suffered by Mr. Reyes are worth so much. The case is still worth what it’s worth, but now the Egners stand alone. No money is lost,” Novak said.
