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           As hospitals today increasingly find themselves occupying the roles of commercial landlords, they are often unaware of legal liabilities that the law imposes upon them by virtue of their ownership of commercial real estate.  Some of these liabilities may come as a surprise to those hospitals.  A law recently enacted by the Massachusetts Legislature illustrates a new potential pitfall for unwary hospital landlords.

                The law was an amendment of a pre-existing law, General Laws c. 143, § 51, that had imposed liability on owners of a buildings for injuries caused to persons as a result of owners' violations of the State Building Code.   In June of this year, in response to a recent decision by the state's highest court that held that the law did not apply to a homeowner who was constructing a single family dwelling, the state Legislature amended the law to broaden its application to "any person who obtains a building permit pursuant to the State Building Code to erect, construct, or demolish a building or structure."

                In the court case that gave rise to the legislation, St. Germaine v. Pendergast, an employee of a subcontractor hired by the defendant homeowner to construct part of his home was injured when a wall fell on him while working on the job.  The homeowner had obtained the building permit in his own name and had hired the plaintiff's employer to construct part of the house.  The homeowner had not hired a general contractor.  The employee sued the homeowner, arguing that the homeowner was liable under the existing law for his injuries.  The plaintiff also contended that the homeowner functioned as a construction supervisor and, as such, assumed a non-delegable duty to ensure compliance with the State Building Code. 

                The Supreme Judicial Court rejected the plaintiff's arguments, ruling that the homeowner had not under the circumstances assume the duties of a licensed supervisor or general contractor with respect to liability for violations of the State Building Code.  The Court reasoned that the imposition of such a duty on a homeowner in the absence of clear legislative intent to do so would constitute an unwarranted expansion of the common law duty of a homeowner to maintain property in a safe condition.  The Court further held that the existing law did not apply because a single family home that was under construction did not constitute a "building" or "structure," as contemplated by the existing law.

                Shortly after the decision, the Massachusetts Legislature amended the law to broaden its coverage.  The new law, enacted in June of this year, makes "any person" who obtains a building permit to "erect, construct or demolish a building or structure" liable "to any worker or person for all injuries and damages that result from the failure to provide a safe workplace, or caused by a violation of the State Building Code or other codes, by-laws, rules and regulations." 

                This new law constitutes an expansion of liability exposure not only for homeowners, but also for owners of commercial buildings.  Hospital corporations have increasingly found themselves in the role of commercial landlord.  In that role, they must be aware of the new law's applicability to them.  A hospital that obtains a permit pursuant to the State Building Code for the erection, construction or demolition of any building or structure has a statutory duty to provide a safe workplace.  Also, under the new law, a hospital that obtains a permit pursuant to the State Building Code also may be liable for injuries which result from the violation of the State Building Code or other codes, by-laws, rules and regulations pertaining to the construction site.  Workers at the work site who are injured as a result of the hospital's failure to provide a safe workplace or violations of the State Building Code could sue the hospital for damages under the newly-amended law.

                Hospitals should also be aware that the new law applies to causes of action arising on or after November 1, 1988, and not merely to causes of action which have arisen since the passage of the new law.   

                The enactment of the new law may be an indication that the landlords will bear more social responsibility for injuries which occur during construction work.  Thus, hospitals may wish to pay greater attention to the terms of construction contracts with contractors that pertain to the duty to ensure a safe workplace and compliance with the State Building Code and other rules and regulations applicable to the building site.


    Hospital Landlord Liability

    by Attorney Frank E. Reardon

    August 1992