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December 1, 1996 MEMORANDUM TO CLIENTS
PREMISES LIABILITY: "STORE WITH CARE" APPLIES TO DANGEROUS CHEMICALS Property owners, condominium and homeowners' associations, and managers are required to properly keep and store man-made chemicals. Many commonly used chemicals are extremely unstable. Slight environmental changes, such as the addition of a few drops of water, may result in a life threatening brew. Most business-persons are aware of strict Federal and State regulation of chemical disposal, known as "CERCLA"; however, many persons are not aware of day to day storage and labeling restrictions. The danger of entering a room and merely breathing after a chemical stored in the room becomes wet was recounted in a recent appellate decision. Bennis v. State Chemical Manuf. Co. 21 Fla. Law Weekly 2226 (Fla. 4th DCA October 16, 1996). Firefighter Bennis responded to an alarm by an apartment manager who saw smoke forming out of a box containing plumbing drain cleaning chemicals. Water leaking from an adjacent water heater reacting with the chemical created the smoke. Bennis walked into the room, and fell, violently sick. He had to be pulled to the safety of fresh air by two other firefighters. The appellate decision raises two significant issues. The first issue was whether the property owner and manager could be held liable to the firefighter injured in the course of his duties. The second issue was whether the chemicals were properly stored. The "Firefighter's Rule", a traditional "common law" provision, provided that a property owner would not normally be liable to a firefighter responding to an emergency. The Rule sought to encourage reporting of life threatening situations without a delay caused by liability considerations. The Florida legislature modified the Firefighter's Rule in 1990, adopting §112.182(1) Fla. Stat., classifying emergency personal as "invitees". This means that property owners, associations, and managers have:
The key to determining liability can be found in the appellate court's approach to Mr. Bennis' claim. The placement of the chemicals next to the water heater, a potentially dangerous area, while negligent, was not so egregious to be deemed actionable. On the other hand, the failure to warn of a known hidden danger when the manager had an opportunity to warn, did support Mr. Bennis' claim. The appellate decision's second important issue concerned the proper handling of the chemicals. The drain chemical, sodium hydroxide, a commonly used substance, was classified as a hazardous chemical. The manager removed it from its properly labeled container which had warnings, placing the chemical in an unmarked pail. Management never provided any notice to the fire department of the chemicals presence, nor complied with local dangerous substance licensing regulations. The manager's failure to comply with chemical storage and warning requirements may create civil and criminal liabilities, especially in relation to employees! PROMISES, PROMISES, PROMISES: LENDER AND BUYER ESTOPPEL LETTERS MAY MAKE YOU LIABLE!
The sale of real property, even a "simple" condominium unit or homeowner's lot sale has become tremendously complex. The proliferation of non-traditional lenders has expanded the mortgage market and may have allowed relatively lower interest rates and an increase in the number of available mortgages. Unfortunately, common understanding and trust have deteriorated. Frequently associations are placed in the middle of what was a simple transaction. Many lenders now demand Associations swear that certain information is true and correct under the penalties of perjury. Sometimes the requests are proper. Many times the requests are not. As the end of the year approaches with its rush of closings, beware of what you sign! Many times associations are required to disclose information to lenders. Condominium and cooperative associations are required to provide within fifteen days of a unit owner, mortgagee or purchaser's written request, a certificate signed by an association's officer or agent stating the amount of all of the assessments and other monies owed to the association by the unit owner pursuant to §718.116(8) and 719.108(6) Fla. Stat. (1995). If the certificate is not timely signed, then the requester may invoke summary court proceedings to obtain an order requiring the certificate and to pay the requester's attorney's fees. Most homeowner and "master" association Bylaws contain similar requirements. Increasingly lenders demand association's to verify facts beyond an association's knowledge. Many requests seek legal opinions not within an association's competence, and which may not be true. Frequently lenders ask seemingly minor questions, such as whether the developer holds any interest in the project. However, most associations have no knowledge of whether the developer holds any mortgages on the property, or holds any other interests. The lender's question may require a review of the association's "governing documents" to determine what type of retained interest the developer may have including such seemingly minor items as easements, or approval for units the developer may acquire in the future. Significant liability may attach to a certificate misstatement. Lenders seek the certificates to transfer the risk of their own investigation to the association. If a loan is not repaid and the certificate is false, then the lender may seek recourse based upon the false statements. The individual executing a false certificate may be guilty of perjury. The association and individual signing the document may be responsible for the unpaid balance of the loan and any costs associated with the collection of those monies. Remember that the purpose of signing a document is usually to provide the recipient of the document a "comfort level" that the signer has read and approves of what the document says. Unless, you read, understand and agree with what you are signing, DO NOT SIGN! HAPPY HOLIDAYS
The firm wishes you a safe and healthy holiday season. To permit the staff time with their families, the firm will be closed on December 25, 1996, and January 1, 1997. The offices will also be closed on the afternoon of December 13, 1996.
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