We’ve already talked about this, but it needs some more dis­cus­sion. If some­one is injured and the injury is related to your lease or if there is prop­erty dam­age, then the lease plays a key role in decid­ing who pays. You and your land­lord should have insur­ance to cover these claims, but these sorts of things still take a lot of your time. They also cause a lot of anx­i­ety. So you’ll want to min­i­mize this as much as possible.

The lease will nor­mally spec­ify how lia­bil­ity should be divided between the par­ties. If it doesn’t, then the law will decide liability.

One way to divide lia­bil­ity is to base it on the per­cent­age that each party is at fault. But this requires lots of litigation.

Another way to do this is to base lia­bil­ity on par­ties and prop­erty regard­less of fault. Each party takes care of their prop­erty, con­trac­tors, and employ­ees. This lessens inten­sive fact-based fights. There are a few other things to con­sider in this arrange­ment such as worker’s comp claims. You also need to make sure that each of you pur­chases insur­ance to cover your lia­bil­ity and each party is named as an addi­tional insured on each other’s poli­cies if some­one tries to tag you for some­thing that the other per­son has assumed lia­bil­ity for. That way your defense costs can be cov­ered. Then if a third-party is injured, the land­lord and ten­ant are liable for the injury to the extent of their fault.