oDamages= FMV Rent for remainder of lease – Rent stipulated in lease for rent of lease (+any special damages)o$200= $1000/mo (FMV) - $800/mo (rent)o10 months left on lease you would collect $2000Tenant does not have to continue to pay rent:oIf he is not given possessionoIf there’s an evictionCONDITION OF PREMISESTraditional Approach:oLandlord’s Duty—“Caveat Emptor”Tenant takes the premises “as is” & landlord had no duty to repair.Exceptions: 1.short-term leases of furnished dwellings;2.leases of buildings under construction;3.L fraudulently misrepresents or conceals condition of property; AND4.Common areasL under no obligation to warrant premises are fit for anythingLease as conveyance—T has estate in LandOriginally primarily agrarian—land itself“men were men”Men could inspect landIMPLIED WARRANTY OF HABITABILITYCovenant (duty) of Delivery PossessionCovenant (duty) of Quiet EnjoymentCL Caveat Emptor generally applies to commercial leases; virtually all states haverejected its application to residential property.oIn those jurisdictions a warranty of habitabilityis impliedin residential leases.oWaiver to the implied warranty of habitability is NOT allowed!!!oWade v. JobeModern leases are usually for use of structures, no equal bargaining power, follows trends in consumer protections laws, products liability, tort laws. A minor violation of a housing code is not a violation L only needs to maintain “bare living requirement.” Codes can be enforced through state and local employees. However, citizen is on the premises and is aware of problems so he needs toinform the state and local employees of the issue. Elements for breach of implied warranty of Habitability:1.Premises not in habitable conditiona.Substantially violate of Housing Code or threatening the health and safety of the T2.L must have notice of the problema.If at outset, L knew or should have knownb.If after T had possession, L must have actual notice3.L must have reasonable time after notice to repair41
Notice that T is not required to leave, this is dif. then constructive eviction.RemediesoT can continue to pay rent & sue L for reimbursement for excess rentoT can withhold rent (this is incentive for L to repair)oDAMAGES:Percentage Diminution approachreflects how much T enjoyment of the possession of the property has been reduce by the L’s breachHow much should the rent be reduced (bring in an expert to determine this)?oRat infestation -10%oNo hot water -40%t/c reviews the materiality of the particular defects & the length of time such defects haveexistedNarrow and Broad Damages Formula:oNarrowDamages(Contract Rent – FMV in defective condition) = $$$Applies only when the defect occurs AFTER you signed the lease!