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Capacity to Generate Income May Impose Duty on Commercial Owner in NJ

May 8, 2012

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In <em>Ethel Gray v. Caldwell Wood Products</em>, New Jersey’s Appellate Court has held that a commercial property owner of a vacant building has a duty to maintain the vacant building’s abutting sidewalk.  Plaintiff slipped and fell on the sidewalk abutting defendant’s vacant commercial building that had allegedly not been cleared of snow and ice.
Defendants were granted summary judgment by the trial judge who relied on <em>Abraham v. Gupta</em>, 281 N.J. Super. 81 (App. Div. 1995) which held that “the owner of the vacant commercial  lot could not be held liable because that property: (1) was not owned by or used as part of a contiguous commercial enterprise or business; (2) did not entertain a daily business activity on the lot to which safe and convenient access was essential; and (3) had no means of generating income to purchase liability insurance or to spread the risk of loss.”   
Plaintiff demurred and argued that issues of fact remained surrounding the building’s potential to generate income, the active marketing of the building at the time of the accident, the eventual sale of the property, and the owner’s ability to spread the risk as evidenced by commercial insurance coverage on the property.  The Appellate Court distinguished <em>Abraham</em> and held that the commercial property owner here was liable because the building had the capacity to generate great income.  Moreover, because the commercial property owner was showing the building to potential buyers, it had a duty to maintain the premises in a reasonably safe condition.  As such, the Appellate Court reversed the trial court’s decision and remanded the case for further proceedings.
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Thanks to Alison Weintraub for this post.  If you have any questions or comments about this post, please email Paul at <a href=""></a>.

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