Are You Swimming In Liability? Lessons Pool Owners Can Learn From Demi Moore's Asset Protection Fail

Do you remember a couple years ago (2015ish) when some guy drowned in actress Demi Moore's pool? The incident caught the media's attention and made me think of the pool safety and liability issues that my clients deal with.
As a lawyer with many clients who own real estate from California to Louisiana where pools are common, I thought it would be both helpful & fun (yes, lawyers can be fun) to address the issues of pool liability and safety.

Your Pool Is a Liability

Let's start this fun discussion with pools. Do you own a pool? In most states, you're responsible for keeping your pool "reasonably safe".
What happened at Demo Moore's pool is something that could happen to anyone, including you. Someone else (her assistant) held a party at her house while she was away and a man ended up drowning in the pool at this party.
Since Demi’s assistant is an employee, that means that Demi is also liable for her employee’s actions. So her assistant’s failure to keep the pool safe during the party becomes a liability issue for Demi, which naturally, sucks for Demi.
Let's go over a few tips so that you don't end up like Demi Moore, who at the time of this writing, is still in court regarding that unfortunate incident 2 years ago.

How to Protect Yourself From Lawsuits and Liability as a Pool Owner

What You Should Know About Strict Liability and Local Laws

There are two ways you can be liable for accidents that occur at your pool. First, if you violate a local law (city or state) that relates to pool safety you can be held solely liable. In most instances, there are laws that say what safety precautions should be present at your home or property. These requirements of these laws vary by state and include things fences, pool covers, and rails.
If your property and pool do not comply with these requirements and an accident occurs at your pool, you can be held “strictly” liable for the accident that occurs on your property. Just like Demi Moore.
Make sure you understand the laws in your city and state so that you are in compliance. Please don't end up in a situation like Demi Moore!

Pool Accidents and How to Avoid Them

The second way you can be held liable for a pool accident, is if your property and pool is deemed "unsafe". Indicators of an unsafe pool are broken fences, rusty rails, and lack of markings that tell people how deep your pool is. The biggest one by far however, is lack of supervision while children or other persons who may need supervision are around.

If you are aware of a dangerous pool condition and don't fix it, you are liable for any accidents. In the case of Demi Moore, the argument is that the pool was unsafe because it was not properly supervised while there was a party where alcohol was served.
You should know whether or not alcohol is being served around a pool that you own. And if alcohol is being served around your pool, you better make sure the pool is properly supervised. Hire some kid to be your life guard, and make sure he or she doesn't drink alcohol. (That's right, lifeguards are liabilities too!)
Are you a landlord?
Let's say you own an apartment complex with a pool. As a landlord, you have a duty to your tenants to guarantee that the pool includes the necessary safety features required by law. You can also be liable for damages and accidents to the guests of your tenants. And sometimes, even trespassers can hold you liable for damages incurred from the pool while trespassing.  If you haven't realized it yet by now, owning a pool or a property with a pool is potentially a high liability factor.

The Pool Owner's Guide to Preventing Liability and Expensive Lawsuits

Here’s a short summary of things you can do to limit your liability from pool accidents.

  1. Comply with all safety requirements for your city/state (fences, markings, etc.)
  2. Include a clause or separate pool disclosure and waiver. (These are similar to the signs you see at hotel pools & trust me they're there)

This document will include the following:

  1. The tenants use the property at their own risk.
  2. Have your tenant(s) specify if all of the occupants of your property can swim. If any occupant cannot swim, (infants for example) then additional caution should be taken and indicate in the waiver that the pool must be supervised at all times the child is at home. You may be better off not renting property to someone with an infant if you feel that they're irresponsible, as your liability will increase.
  3. State that your tenant is responsible for maintenance of the pool safety equipment, such as fences, and that the tenant must immediately notify you, the landlord, of any safety feature or pool equipment repairs that are needed.
  4. State that the Tenant agrees to supervise the pool at all times that guests are at the property. This would have saved Demi's rear end.
  5. Make sure that your property/landlord insurance includes protection for the swimming pool and that your insurance agent knows there is a swimming pool on your property. Keep in mind that your insurance company can deny you coverage if you do not have the "adequate" pool safety features as required by law. (This is why you need to know local/state laws).
  6. Own your property with an LLC! This way if something occurs on the property your LLC is liable for any damages as opposed to exposing all of your personal assets. In general, when the LLC owns the property the LLC is liable for anything that occurs on the property and a plaintiff tenant cannot reach your personal assets held outside the LLC.

Nobody enjoys going through a lawsuit, they can drag on for years and cost you big time. Hopefully this article helps all the landlords and real estate investors out there understand the implications of having a pool on their property. While pools can add a lot of value to a home, they do increase liability. Make sure you're in compliance with local/state laws so that someone can't slip, fall, and then sue you for everything! Don't end up like Demi Moore. When in doubt about the legal status of your pool, contact a competent attorney.

Last Updated: 
November 15, 2017

Scott Royal Smith is an asset protection attorney and long-time real estate investor. He's on a mission to help fellow investors free their time, protect their assets, and create lasting wealth.

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