In a buyer’s market with dropping housing prices and dropping interest rates, the numbers of open house signs are increasing exponentially. It is unusual to take a drive on a Sunday without, at least, seeing three open house signs. As you are searching for your dream home or your profitable investment, you may want to consider that you, as a visitor to an open house, if injured during your visit to that open house, have rights. Which individuals have a responsibility for maintaining the premises during an open house; the broker, the owner, both, or neither? As it turns out both the broker showing the house and the owner of the house owe a duty of care to the open house visitor.

Traditionally, under common law, a landowner’s tort liability towards a person who has been injured due to a dangerous condition on private property is based on the status of the person who was injured. Under common law there are three categories of entrants on private property: business invitees, social guests, and trespassers. An owner of a private premise has a duty only to warn trespasser of artificial conditions that pose a risk of death or serious bodily harm. As for social guests, owners have a duty to warn of any dangerous conditions that the owner had actual knowledge of, which the guest is unaware. However, an owner is not obligated to discover concealed defects. The highest duty of care of an owner owes is to a business invitee. An owner has a duty of reasonable care to guard against any dangerous conditions on his or her property that the owner knows about or should have discovered. In this regard, an owner has a duty to conduct a reasonable inspection to discovery concealed dangerous conditions. In certain circumstances, a court may determine based on public policy considerations that the common law should not be used. Instead, a court may decide to allocate the duty of care based on the general tort obligation to exercise reasonable care against foreseeable harm to others, no matter what type of category they fit into.

In the case of the open house scenario, the New Jersey Supreme Court was faced with the task of deciding whether the traditional common law principles were applicable or whether the general tort obligation was applicable. Ultimately, the Court decided that the traditional common law premises liability theory did not adequately address the open house scenario. Open house circumstances were not comparable to any of the rigid categories of entrants under the traditional common law notions of premise liability. In an open house situation, you have a broker who is the agent of the owner, but is not in control of the premises like an owner. In addition, you have an entrant that is not a trespasser and is arguably neither a business invitee nor a social guest. Therefore, the Court had to determine what degree of duty to impose on the broker, in light of the considerations of public policy, fairness and justice. The Court felt that in this situation there was a dual invitation and therefore, a shared responsibility on the part of the owner and broker for the well-being of potential purchasers, since they share the benefits of the person’s presence on the property. Implicit in the broker’s invitation to customers is some degree of responsibility for their safety while visiting the premises. Furthermore, the Court found that the owner’s duty of care concerning their premises was non-delegable.

Ultimately, the Court determined that a broker is under a duty to conduct a reasonable broker’s inspection when an inspection would comport with customary standards governing the responsibilities and functions of real estate brokers with respect to open house tours. The broker is under an obligation to examine the premises to ascertain the obvious physical characteristics that are material to saleability and those features that open house visitors would normally examine during a “walk through.” There is a duty to warn of any such discoverable physical features or conditions of the property that pose a hazard or danger to such visitors. However, there is not duty to warn of dangers not otherwise known or that would not be revealed during the course of a reasonable inspection. Therefore, brokers have no duty to inspect for latent defects that are hidden, of which the broker has no actual knowledge. Moreover, the broker does not have a duty to remedy the hazardous or dangerous condition, only to warn against the condition.

In addition, the court noted that the owner has a non-delegable duty towards invitees, including open house visitors, to make reasonable inspection of property and remedy any reasonably discoverable defects. The owner is primarily liable for the safety of all invitees, a duty that is higher than the broker’s duty of care.

So next time you are going from open house to open house on a warm Sunday, know that you have rights in the event you are injured on the premises of an open house and listen carefully to any warnings given by a broker to avoid an injury.