It’s any landlord or property manager’s worst nightmare: You get a call reporting a fire on your property—and there were fatalities.
In the case of the Ghost Ship fire, there were nearly 40 fatalities. The horrific tragedy took place in an Oakland, CA warehouse that had become a gathering place and residence for dozens of artists priced out of mainstream Bay Area communities.
Now, a bewildered community is asking, “How could this have happened?” Authorities are still trying to figure out the cause of the blaze that trapped scores of young people in a deadly inferno on December 2. Billboard is reporting that it was likely an electrical fire that began among kitchen appliances in one of many illegal living spaces in the warehouse.
But the warning signs were there. Indeed, if one were to design a training facility for new fire inspectors to illustrate what reckless disregard for fire risk looks like, you would be hard-pressed to create a better one. By all accounts, the Ghost Ship fire was a disaster waiting to happen. Former residents have referred to it as a “death trap,” with at least one having moved out due to the dangerous conditions. Indeed, looking at photos of the inside of the building, the risk was blatantly obvious.
The building’s landlords, Derick “Ion” Almena and his girlfriend, Micah Allison, had been renting the facility since at least 2012. The couple had lived in the Ghost Ship with their 3 young children until March 2015, when the kids were removed from their custody. They packed the wood-raftered warehouse from floor to ceiling with highly flammable materials, from propane tanks and generators to wood furniture and pianos. The space was literally a tinderbox.
The maze of illegally partitioned units were rented out as studios and living space to a struggling community of artists for a bargain of $600 per month. Parties and concerts were regularly held in the building, including the night of the fire. Residents (24 at the time of the fire) brought in hot plates, space heaters, camping stoves, generators, and other small appliances. These appliances drew on an overworked grid that siphoned power from neighboring buildings through a hole in the wall, completely overwhelming the building’s jury-rigged wiring. Sparks and outages from the overloaded, incorrectly installed electrical system were common, and there had been previous fires—possibly including a refrigerator fire just one day earlier.
To reach the dance floor, you would climb a narrow, rickety, highly flammable staircase built by residents from wooden pallets. The building’s primary exit was not visible from the staircase, forcing partygoers to navigate a cluttered maze of obstructions in the pitch black, smoke-filled space. (To get a better idea of the space, check out the New York Times’ 3D model of the building.) The fire spread in an instant and became a raging inferno in minutes; then the roof collapsed, trapping three dozen partygoers upstairs before the fire department arrived on the scene. The warehouse was visible from the fire station’s driveway just 500 feet away.
The gross negligence and dereliction of the most basic safety standards and responsibilities on the part of the master tenants, the illegal residents, and the building’s owner cannot be overstated. In addition to the hazards noted, local sources report that there were no fire suppression or alarm systems, emergency auxiliary lighting, or clearly marked exits. No one had attempted to secure any residential or public assembly permits.
The warehouse itself had been owned by Chor Ng since 1988, who also owns the adjacent lot and a number of other Bay Area warehouses. Ng’s buildings had reportedly racked up a number of building violations over the years for unsafe conditions, resulting in over $20,000 in city liens against the properties. The Ghost Ship’s lot had been zoned for commercial use, and Ng’s daughter has stated to the media that Ng was unaware that there were people actually living in the Ghost Ship. Several accounts state that Almena and Allison instructed residents to hide their belongings and make themselves scarce when Ng would stop by. However, locals say that it was evident that people lived inside from a casual drive-by.
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The San Francisco Chronicle profiled Ng as a “polite, hands-off landlord” who showed up once a month to collect rent checks from a variety of commercial tenants. Despite the Ngs claiming ignorance to the fact that people were living in the warehouse, the record shows dozens of complaints to city zoning and fire officials about illegal uses through the years, starting before Almena took over the property as the master tenant. City officials had once asked the Ng family to do a clean-up, including removing a wood structure from atop a fence.
For his part, Almena insists that he had asked the Ng family for assistance in bringing the wiring up to code and installing fire safety features. However, he doesn’t account for his allowing people to reside in the building illegally.
Astonishingly, it also appears that the city failed to inspect the building for more than 30 years—despite being the subject of nearly two dozen building code complaints. An inspector had reportedly visited as recently as November 16, but left when they couldn’t get the owner’s permission to enter the building.
So who’s ultimately at fault? While there’s still a lot of investigation and adjudication left to be done, there is clearly plenty of blame to go around, from the city to the landlord to the owner to the illegal residents. There are criminal investigations focusing on Ng, Almena, and Allison, each of whom potentially faces charges of involuntary manslaughter, on top of scores of misdemeanor code violations.
Meanwhile, 36 young lives were lost, with at least two families interested in pursuing wrongful death claims. The city won’t be much help in the liability department; it’s a long-held principal of common law that the city itself cannot be held responsible or legally liable for damages arising from failure to inspect or enforce codes. Since there’s no property manager in the chain of liability, then the process will focus on the landlord and the owner.
But it won’t end there: The plaintiffs’ lawyers will likely push to name every general contractor who ever worked on the building as co-defendants. They may also go after appliance manufacturers. The event promoter also faces potential liability.What should landlords learn from the tragic Ghost Ship fire? Find out on the #BuildiumBlog. Click To Tweet
Key Takeaways from the Ghost Ship Fire in Oakland
So, what lessons should we learn from the horrifying Ghost Ship fire? Here are some critical takeaways:
- If the landlord is unable or unwilling to put his or her own eyes on the property on a regular basis, then a property manager is non-negotiable. The property manager has a fiduciary responsibility to the landlord. Without a property manager, the hands-off landlord is blind to the risks to which they’re exposed.
- The property manager’s errors and omissions insurance policy will go a long way to protect the landlord’s financial interests—and those of the tenants.
- You likely need more insurance than you think. With 36 deaths, any liability insurance on an old warehouse property not even zoned for residential or entertainment use to begin with will be easily overwhelmed. This is a classic case where a landlord can use every bit of umbrella liability coverage available.
- Count on officials nationwide cracking down on similar arrangements—no mayor wants his or her city to be the next headline.
- Are you or your tenants hosting concerts, block parties, or other events on your property? Consider event insurance, which can protect you against liability arising from the event itself.
- Landlords face criminal prosecution for failure to comply with fire safety regulations. It’s too early to see how it will play out in Oakland, but Crain’s Business Journal reports that a number of criminal convictions resulted from a 1998 fire resulting in the deaths of three Brooklyn firefighters after building managers illegally shut off sprinkler valves.
- Real estate is often touted as a passive investment opportunity—but it’s not so passive that landlords aren’t responsible for knowing what’s going on in their buildings. In the event of injuries or fatalities, everything will ride on what the landlord knew—or reasonably should have known.
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