Withhold rent and
you can count on a visit by a process server with an unlawful detainer
complaint identifying you as the defendant! Like night follows day!
Like the sun rises in the east!
But, you argue, the
Lessor, in breach of his obligation under the Lease, has failed
to repair the roof of the building. Will the court consider this
failure to justify your withholding of rent?
In a case arising
out of a restaurant business in the City of Ontario, California,
the Lessee failed to pay rent and taxes and was thereafter confronted
with a Three Day Notice to Pay or Quit. An unlawful detainer action
quickly followed.
In his Answer to the
Complaint, the Lessee set forth an affirmative defense essentially
alleging that the Lessor had breached its covenant to repair the
roof of the building causing the Lessee substantial damages. The
Lessee alleged that the roof leaked water to such an extent that
it forced the Lessee to operate his business with "buckets
on the tables to catch the leaking water, and with two inches of
standing water on one portion of the floor of the restaurant."
The Lessor won at
the trial level. The Lessee then appealed, but won no solace from
the Court of Appeal which ruled that in a commercial setting, the
Lessee could not assert the roof issue as an affirmative defense.
The Court of Appeal concluded that the Lessee was privileged to
pay the rent and file a separate action for damages against the
Lessor as a result of the Lessor’s breach of contract.
The Court of Appeal
observed that in a commercial lease transaction:
"The parties
are more likely to have equal bargaining power, and, more importantly,
a commercial tenant will presumably have sufficient interest in
the demised premises to make needed repairs and the means to the
make the needed repairs himself or herself, if necessary, and then
sue the lessor for damages."
Circumstances are
different, however, when a residential lease is involved. The courts
have determined that in a residential apartment lease, there exists
an implied warranty of habitability.
An express warranty
is a warranty stated in words in the contract. An implied warranty
is inferred from the content of the contract, but not expressed
in words.
Under the implied
warranty of habitability, the landlord is considered to have warranted
that the property is, and will be, repaired and maintained in a
condition that meets certain minimum standards of habitability.
The failure to meet those minimum standards will constitute a breach
of the warranty on the part of the landlord. The implied warranty
of habitability may be raised as a defense in a residential eviction
action based on non-payment of rent for the period during which
the warranty has allegedly been breached.
Illustrations of conditions
which will constitute a breach of the implied warranty of habitability
include:
Collapse of a bathroom
ceiling and the failure to repair
Continued presence
of vermin
Lack of heat
Plumbing blockages
Exposed and faulty
electrical wiring which was illegally installed
Windows broken and
boarded up
No hot water
The failure, under
certain circumstances, to protect tenants against criminal conduct.
Although some tenants,
not adequately protected against criminal conduct, have asserted
the breach of the implied covenant of habitability as a defense
in an unlawful detainer action, other tenants have challenged Lessors
in more imaginative and economically productive ways.
In one California
case, 75 tenants separately filed Small Claims Court actions contending
the they were disturbed by non-tenant drug dealers working from
and around the lessor’s property. After consolidating the actions,
the court awarded $218,325 to the plaintiffs. On appeal, the award
was upheld by the Court of Appeal, which relied on a Health &
Safety Code Section making each building used for drug dealing a
nuisance. The court allowed these plaintiffs to recover for mental
suffering (compensation for discomfort and annoyance) under this
"nuisance" theory.
The moral of the story?
In a commercial lease transaction, pay the rent and then argue or
sue if the Lessor has breached an obligation under the Lease. If
you lose possession in an unlawful detainer action, the consequences
are substantial. Your equipment, off- location, will produce little
income!
