Question: We bought a home in Laveen at the height of the market in 2006. At the time that we bought our home, we had wonderful neighbors, and new shopping and recreational activities were being developed in the surrounding area. After the real-estate market collapsed, however, most of our neighbors lost their homes to foreclosure, and the community basically disintegrated. Very sad. We then moved to a nice community in north Phoenix. We rented our former home in Laveen to what we thought were a nice couple, but the neighbor across the street who still lives there recently called us and said that there have been cars coming in the middle of the night to our former home, and there are different people staying there all the time. Our neighbor thinks that our former home has become a “drop house” for illegal aliens. When we furnish the the standard two-day inspection notice to the renters of our Laveen home and inspect the home, everything is in immaculate condition. The rent is always paid on time. If we complain to the police, and our neighbor is wrong, we are concerned that we would lose good renters. My wife, however, says that if there is a crime such as a gang-related shooting in our former home we could have liability. Is that true?
Answer: Yes. The general rule is that an owner of a rental property is not responsible for the wrongful acts of a tenant occupying the rental property. There is an exception to this general rule, however, if the landlord knows or should have known of activities by the tenant in the rental property that create a nuisance that could result in harm to neighbors or even a passer-by. Therefore, based on the information from your former neighbor, you could have liability if there is a gang-related shooting in your former home, especially if one of your neighbors is injured or killed. The lease with your renters should have a requirement of a renter’s insurance policy. you should ask if your renter to give you a copy of that renter’s insurance policy. In addition, you should confirm with your own insurance agent that you have liability coverage for any illegal activity at your former home.