Property Management: Whether a Property Management Company Owed a Tenant a Duty of Care in Respect of Independent Contractors (Shamsan v 44-49 Lowndes Square Management Company Ltd – 2024)

Where a property management company engages an independent contractor to carry out services at a property, does the management company owe tenants a duty of care in respect of the contractor’s conduct?

The background

In Shamsan v 44-49 Lowndes Square Management Company Ltd [2024], the appellant occupied a flat on a shorthold tenancy in a building containing leasehold residential units, of which the respondent was appointed as the property management company.

The respondent engaged an independent contractor to deliver a number of services, including portage, at the building.  Porters were employed by the contractor. Residents at the building were required to leave copies of keys for their properties with the porters. The appellant claimed that possessions had been stolen from her flat, alleging that porters negligently gave her keys to criminals. She brought proceedings against the respondent rather than the contractor, claiming that the respondent owed her a duty of care and was liable for her losses.

The respondent applied for – and was granted – an order for summary judgment to state that the respondent did not owe a duty of care to the appellant. The appellant appealed.

The decision

The Court of Appeal dismissed the appeal, finding the summary judgment to have been correctly granted.

The appellant argued that the negligent acts by the contractor’s porters breached the duty of care owed by the contractor, for which the respondent was liable. The Court of Appeal concluded that the contractor was independent of the respondent, and that the respondent had no control over the delivery of the portage services by the porters. The respondent’s contract was with the contractor, which delivered the services. The respondent collected payment for these services from the leaseholders, and paid the contractor from those charges.

There was no vicarious liability on the part of the respondent for any negligence on the part of the independent contractor or its employees.

Advice and action for landlords

This judgment will come as some relief to property managers and landlords who appoint independent third parties to undertake services on their behalf.

Where a contracted agent is engaged to deliver a service, the agent and its employees act independently. No duty of care is owed by the appointing party – the property manager, in this case – to leaseholders in respect of negligent actions of the agent’s employees.