Brief Fact Summary.
The Plaintiff sued Defendant for unpaid rent on medical office space. The Defendant argued that defects in the premises made the space unsuitable for use as a medical office. The trial court ruled in favor of Defendant, holding that the premises were not suitable for a doctor’s office and damages were awarded to Defendant for relocation costs. The court of appeals ruled that Plaintiff was entitled to back rent. Defendant appealed.
Synopsis of Rule of Law.
In a commercial lease, there is an implied warranty of suitability by the landlord that the premises must suitable for their intended commercial purpose.
The warranty means that at the inception of the lease there are no latent defects in the facilities that are vital to the use of the premises for their intended commercial purpose and that these essential facilities will remain in a suitable condition.View Full Point of Law
Dr. Davidow (Defendant) and Inwood North Professional Group-Phase I (Plaintiff) entered into a five-year lease for space to be used as a medical office, stating that Plaintiff would provide for air conditioning, electricity, hot water, and general maintenance services. During the lease, the premises often had a leaky roof, which created mold and mildew in the office; rodent problems; broken lights in the hallways Defendant vacated the premises and refused to make remaining rent payments. Plaintiff sued Defendant.
Whether there is an implied warranty of suitability by a commercial landlord that the leased premises are suitable for their intended commercial purpose.
Yes. The court of appeal’s ruling is reversed. Plaintiff is not entitled to unpaid rent because it breached the implied warranty of suitability due to its failure to maintain its premises in a manner suitable for a doctor’s office.
In commercial leases, an implied warranty of suitability, providing that the premises must be suitable for its intended purpose, exists. Those who enter into a commercial lease are similarly situated to those who enter into a residential lease in that they may not be able to properly inspect the premises in question. Therefore, an implied warranty of suitability should exist in commercial leases. Here, Plaintiff did not provide suitable conditions for a doctor’s office—the premises’ intended purpose. The leaky roof, rodent problems, and broken hallway lights were all under Plaintiff’s control, and the failure to cure them constitute a violation of the implied warranty of suitability by preventing the normal functioning of a doctor’s office.