Open Home burglaries - Who is responsible?

Rosy Sullivan

Opening up a private home to a bunch of complete strangers will always create risks to both vendors and real estate agents. One obvious risk is theft. Burglars could use the opportunity to steal valuables from under the nose of an inattentive agents, or alternatively, to ‘case the joint’ for a future robbery after noting the floor plan, alarm systems and the best doors and windows to use for access.

There have been many reported incidents of a vendor’s personal items being stolen while their home has been open for inspection.  Queensland Police laid 151 charges against a man after a spate of thefts at open homes in South East Queensland in which he bagged $131,000 of valuables from several homes.  Radio presenter Derryn Hinch had $50,000 of personal items stolen from his Melbourne property after the thieves familiarised themselves with the property during an open home.

But who is actually responsible when an item of personal property goes missing during an open home?  It seems there are no black and white answers to this question, but rather a number of things that both vendors and agents can do to minimise risks.

Firstly, if you are showing a rental property, a new provision in the Residential Tenancies Act. section 61(2) states that a landlord or agent can be held responsible by the tenant or vendor for damage or theft  at an open or private inspection, and an application for compensation can be made to the CTTT.

But when a house is for sale, the question of responsibility is less clear.

From an insurance perspective, the first vital thing to note is that thefts that occur during open homes are generally not covered by the home and contents insurance policy of the vendor.  Most policies do not allow for claims of damage or theft when you have invited people into your home, as in the case of an open home.  This has come as a nasty surprise to many home owners, and the natural response of a vendor in this unfortunate situation is to come knocking at the agency’s door.

So, could an agent be held liable for goods stolen during an open inspection? The answer is Yes - it is entirely possible.  Real estate agents have a professional duty to exercise reasonable skill, care and diligence in performing their functions as an agent.  This duty of care extends to conducting open homes.  However, agents can protect themselves from any potential liability by taking a few basic precautions.

The first precaution is to make known to the vendor the risks of having an open home, a simple step often overlooked by hasty agents looking to get buyers into the property as soon as possible. If the vendor chooses to proceed, knowing the risks, they assume an element of responsibility for any incidents that may occur.  This means that the production of a small booklet or brochure that details the simple steps that a vendor can take, is a great move towards minimising the agent’s level of risk.

The second step is to assist the vendor in making preparations for the open home. In terms of theft, the simplest precaution is to make sure the vendor safely stores away any valuables that could be easily taken.

Thirdly, consider the size of the property and the likely number of attendees at the open home, and make sure you have adequate staff on site during the open inspection.

The best agents, however, will go the extra mile to ensure the safety and security of the vendor’s property as a matter of good customer service. This includes checking the identification of all those who enter the home, and where necessary, hiring security. There have been numerous instances where vendors ‘suddenly find’ that stolen item when the agent tells them they have sent an inventory of every person who walked through the home to the police.

There is actually now a company who specialises in insurance and security for open homes called, funnily enough, Open Homes Insurance and Security. Starting from $295 you can get insurance against theft or damage up to $5,000.  The company can also provide security guards to conduct ID checks and deter potential thieves. These services really are tailored to the higher end of the market, but if that’s where you work, it’s certainly worth mentioning this option to clients.

Many of the agents we know are already taking some or all of these precautions as a matter of standard industry practice. But for those who aren’t, incorporating these simple practices into your agency is a great way to build consumer confidence, and importantly, protect your business and reputation.