Liability Waiver

Should I Implement a Special Liability Waiver?

Question: I am receiving questions from rental agencies not only about disclosures, but also some type of liability release for the renter to sign prior to occupancy. Has there been some type of suggested language crafted by NC REALTORS® for their members regarding liability?

Answer: NC REALTORS® has not created or recommended any hold harmless/indemnity/release language that a property manager may require a vacation rental guest to sign that would protect the property manager from potential liability if the guest contracts COVID-19.

There are several reasons why the decision was made not to provide such language at this time.

First, is causation. If a guest contracts the virus and attempts to hold the property manager liable for damages, it is going to be very difficult for the guest to prove that they contracted it as a direct result of occupying the vacation rental property.

Second, is assumption of risk. The rapid spread and highly contagious nature of COVID-19 is well known, so we should all assume that there is a risk of contracting the virus associated with going anywhere. If one chooses to voluntarily expose him/herself to a known and appreciated danger, he or she will have difficulty holding a property manager liable for injury based on the manager's alleged negligence, even if he or she is able to establish a causal link between their injury and their occupancy of the rental property.

Third, is enforceability. If a guest has entered into a contract that allows him or her to occupy a vacation rental for a specified period of time, and has complied with the terms of the contract, what consideration is the guest receiving in exchange for signing a hold harmless/indemnity/release form? Unless the guest is receiving some “real” consideration, there would be a strong argument that the hold harmless/indemnity/release is unenforceable. Stated differently, if the guest refuses to sign the document, on what basis is the manager going to prohibit them from occupying the property?

Having said the foregoing, we do not discourage vacation property managers from engaging an attorney to create a document for them to use if that’s what they decide is best for their business operations. Our recommendation however, is that a manager should focus on confirming in writing with guests what steps have been taken by the manager to minimize the risk of virus spread and recommending protocols that guests should follow to protect themselves. Guidance about proper cleaning, disinfecting, and hygiene protocols can be found at the Centers for Disease Control and Prevention and the North Carolina Department of Health and Human Services. In our view, if someone claims that you caused them harm, it is more important that you be able to demonstrate that you conducted yourself in a reasonably prudent manner under the circumstances than to rely on protection from a form that may not even be legally enforceable.

Published on Monday, May 18, 2020