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PROPERTY II OUTLINE REGULATING RENTAL HOUSING IMPLIED WARRANTY OF HABITABILITY A. “Common Law Rule:” In the rental of any residential dwelling unit an implied warranty exists in the lease that the Landlord will deliver and maintain the premises that are safe, clean, and fit for human habitation. ( Hilder ) 1. Generally in all jurisdictions an adequate standard of habitability has to be met and breach occurs when the premises are uninhabitable in the eyes of a reasonable person. 2. Covers patent and latent defects 3. A substantial (not minor) violation of the housing code is Prima facie evidence of breach of implied warranty of habitability. 4. It is not necessary that the tenant abandon in order to sue for breach. 5. Does not extend to amenities. B. In order to bring a cause of action for breach the tenant must show that he notified the landlord and allowed reasonable time for its correction. Remedies A. Tennant may sue for damages; jurisdictions take three approaches to damages for rent paid. 1. The difference between the value of the property as warranted and the value of the property with the defects. 2. The difference between the agreed rent and the fair rental value of the premises. 3. “Percentage-diminution approach:” The agreed rent is reduced by a percentage equal to the percentage of lease-value lost by the tenant in consequence of the landlords breach. B. Tenant may also sue for punitive damages if the breach is willful, wanton, or fraudulent. C. Tenant may withhold payment of future rent. 1
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1. This is the more typical scenario. Tenant withholds, landlord sues for breach, and tenant raises breach as a defense D. Tennant may make repairs and deduct value from rent. Exceptions A. Some jurisdictions allow tenant to waive the implied warranty of habitability but this is the minority view. 1. Jurisdictions that allow waiver typically require a showing of equal bargaining power between landlord and tenant. B. Warranty does not typically apply to commercial leases. C. No exception for circumstances outside landlord control, e.g. garbage workers strike. Retaliatory Eviction A. Most jurisdictions forbid retaliatory action by landlords 1. Common approach is to create a rebuttable presumption of retaliation if a landlord seeks to terminate tenancy, increase rent, or decrease services within an established time period after a “good faith” tenant complaint. Landlord Tort Liability A. “Basic Tort Negligence:” Modern rule is that a landlord is liable for failing to disclose dangerous defects. This extends to defects that the landlord should have discovered, even if he had no actual knowledge. B. Landlord is also liable for injuries to public on the premises if he knows, should have known, ect. of a dangerous defect.
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