Reference calls concerning an individual’s prior rental history concerns owners and operators in the context of both applicants and departing residents. An owner or operator calling for a reference must be aware that another owner or operator may be reluctant to provide negative information out of concern for liability to the applicant. The owner or operator must consider the possibility that a reference source might provide false positive information out of a desire to see the applicant leave.
In fielding calls for references, an owner or operator must ensure against providing false and negative information about a current or former resident. Although an owner or operator’s communications may be privileged to a limited degree, any information that the owner or operator knows or ought to know is false could result in liability for defamation. Additionally, information known or believed to be true but not relevant to the inquiry could be construed as “excessive publication,” which also can support a claim of defamation.
Under Indiana case law, a person who makes a misrepresentation may be liable to another person for harm resulting from the misrepresentation if:
- The person making the misrepresentation either intends to induce reliance or realizes that the other person is likely to act in reliance on the statement;
- Such reliance results in action that involves an unreasonable risk of physical harm to the person, and;
- The person making the misrepresentation either knows that the statement is false or knows that s/he does not have the knowledge that s/he professes to have.
At least one court has found that it is no defense to a claim of misrepresentation that the supplier of the misrepresentation did not intend harm.