New ERA Article July, 2001

The Lessor Didn’t Repair The Roof!
Can I Withhold Rent?

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!


[This column is intended to provide general information only  and
is  not intended to provide specific legal advice; if you have  a
specific  question  regarding the  law,  you  should  contact  an
attorney  of your choice.  Suggestions for topics to be discussed
in this column are welcome.]


Reprinted from New Era Magazine
Myles M. Mattenson © 2001-2002

	Myles M. Mattenson ATTORNEY AT LAW 5550 Topanga Canyon Blvd. Suite 200 Woodland Hills, California 91367 Telephone (818) 313-9060 Facsimile (818) 313-9260 *Email:* MMM@MattensonLaw.com *Web:* http://www.MattensonLaw.com	The Lessor Didn’t Repair The Roof! can I Withhold Rent?
Myles M. Mattenson engages in a general civil and trial practice including litigation and transactional services relating to the coin laundry and dry cleaning industries, franchising, business, purchase and sale of real estate, easements, landlord-tenant, partnership, corporate, insurance bad faith, personal injury, and probate legal matters. In providing services to the coin laundry and dry cleaning industries, Mr. Mattenson has represented equipment distributors, coin laundry and dry cleaning business owners confronted with landlord-tenant issues, lease negotiations, sale documentation including agreements, escrow instructions, and security instruments, as well as fraud or misrepresentation controversies between buyers and sellers of such businesses. Mr. Mattenson serves as an Arbitrator for the Los Angeles County Superior Court. He is also past chair of the Law Office Management Section of the Los Angeles County Bar Association. Mr. Mattenson received his Bachelor of Science degree (Accounting) in 1964 and his Juris Doctorate degree from Loyola University School of Law in 1967. Bi-monthly articles by Mr. Mattenson on legal matters of interest to the business community appear in alternate months in The Journal, a leading coin laundry industry publication of the Coin Laundry Association, and Fabricare, a leading dry cleaning industry publication of the International Fabricare Institute. During the period of May 1995 through September 2002, Mr. Mattenson contributed similar articles to New Era Magazine, a coin laundry and dry cleaning industry publication which ceased publication with the September 2002 issue. This website contains copies of Mr. Mattenson's New Era Magazine articles which can be retrieved through a subject or chronological index. The website also contains copies of Mr. Mattenson's Journal and Fabricare articles, which can be retrieved through a chronological index. In addition to Mr. Mattenson's trial practice, he has successfully prosecuted and defended appeals on behalf of his clients in various areas of the law. Some of these appellate decisions are contained within his website.