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  • Nate Carter

Rising Violence Creates Security Risks for Businesses and Real Estate Investors

The rise in violent crime creates greater security risks for businesses owners and multi-family property investors. According to Forbes there were 611 mass shootings to date in 2022. This follows 610 incidents in 2020 and 690 in 2021. Serious acts of violence are one of the risks investors need to include in their due diligence to protect their people, assets, and reputation.

No investor or business owner wants to see harm come to their employees or customers. But owners sometimes overlook the need for security precautions. Failing to implement appropriate and reasonable security measures could also lead to findings of negligence in premises liability lawsuits with judgements costing owners thousands or even millions of dollars. According to the Jury Verdict Research's review of premises liability cases across the country in 2020, the average verdict was $643,099. The median verdict in these cases was $98,160.

Understanding the Risk

Business owners and multi-family property investors must recognize that appropriate security measures are now a cost of doing business. Defendants will be unsuccessful in claiming their business does not require any security measures or that they cannot afford to take reasonable steps to protect staff and customers. Courts will look at evidence to assess whether appropriate steps were taken to mitigate the risk of foreseeable harm. Implementing appropriate and proactive security measures will minimize (if not prevent) monetary damages and, most importantly, avoid or minimize harm to potential victims.

Assessing the Risk

Each business or multifamily real estate faces unique risks based on their type of clientele, the services they provide, their accessibility to the public, and crime rates in the surrounding neighborhood. For example, businesses that serve or allow the consumption of alcohol, will have higher risks than those that do not. Similarly, multi-family properties in historically high crime neighborhoods are at greater risk and thus, will have a higher standard of care than those in low crime communities.

Charlie Ahmad, founder of Group Nine Consulting says "the best way to begin protecting your people, property, information and reputation, is to conduct a security vulnerability assessment for the business or multi-family property." The assessment should be tailored to address the industry-specific threats your business faces. Ahmad adds, "The findings will include identifying specific action steps to help mitigate these risks." He advises, one of the biggest mistakes organizations make is doing the assessment, but then failing to take the necessary steps to mitigate the risks uncovered. (Note: The author previously served as a senior advisor to Group Nine).

Responding to Risk: Adhering to Industry Standards

Business owners and multi-family property owners will want to show that their security practices adhere to accepted industry standards. For multi-family properties this includes physical security measures such as appropriate fencing, specific outdoor lighting, locks, and cameras. But it also applies to adhering to the terms of leases and policies related to tenants.

For example, property owners may implement criminal background checks for all tenants, but there may also be perpetual guests staying at the property. These long-term guests are deemed to be residents. If they are not properly vetted, owners could permit an individual with an extensive history of violent crime to stay at the property.

Ahmad explains, "as it is incumbent on the owner to take reasonable steps to provide a safe living environment for their tenants, vetting all residents should be considered a best practice. Moreover, failing to meet or exceed published security standards, guidelines, and best practices puts every tenant and your investment at great risk."

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