The Lease Requires The Lessor To Undertake Repairs,
But Repairmen Never Appear!   Can I Withhold The Rent?

Your lessor, in breach of his obligation under the lease, has failed to repair the roof of the building.  You contemplate withholding rent to induce your mustached, black-caped lessor to commence repairs.  Is this a worthy approach to solving your problem?  Withhold rent and you can count on a visit by a process server with an unlawful detainer complaint identifying you as the defendant!

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.”

After a loss 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 implied warranty is inferred from the content of the contract, but not expressed in words. 

Under the implied warranty of habitability, the lessor 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 lessor. 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 under a residential lease 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 lessees against criminal conduct.

In California, as in most states, a three day notice to pay rent or quit must be served upon the lessee before the lessor can commence an action for unlawful detainer to recover possession of the property.  What if business is poor, economic pressures are substantial, and you receive such a notice?  What are your options regarding the issue of rent?

Pay the rent.

If you can find the money, pay the rent due before the expiration of the three day notice.  If you anticipate repetitive difficulty in paying rent, beg or borrow the money to buy time to sell your business.

Do nothing.

A dangerous option.  If, however, your attorney concludes that the notice or service is defective, and defenses can therefore be raised in forthcoming unlawful detainer action, you can consider waiting for the summons and complaint and hope that the attorney’s advice was correct.

Negotiate with the lessor.

Many lessors would prefer to receive partial payments under some type of payment plan rather than dealing with vacant space.  Never fear to negotiate.

Vacate the premises.

If you have no hope of securing money to pay the rent, vacating the premises reduces the amount of any judgment that the lessor might obtain against you.

Can a three day notice include late charges?  Unlawful detainer statutes in most jurisdictions refer to default in the payment of rent and make no mention of charges other than rent.  Thus, it might be argued that a notice is ineffective if it includes amounts other than rent.  Many leases, however, define rent under the following provision:  “All monetary obligations of lessee to lessor under the terms of this Lease are deemed to be rent.”  A late charge under such a definition will thus likely be recoverable by the lessor.

What if the lessor’s statement of rent in the three day notice is slightly in error?  At one time, such a defect could be fatal; however, most jurisdictions, including California, presently provide that if the amount claimed in the notice is clearly identified as an estimate, the defect is not fatal.  In California, the applicable statute provides that if “it is determined upon the trial . . . that rent was owing, and the amount claimed in the noticed was reasonably estimated, the lessee shall be subject to judgment for possession in the actual amount of rent and other sums found to be due.”

Unlawful detainer trials are entitled to priority in court and thus are heard relatively quickly.  In California, a lessee has five days to respond to an unlawful detainer complaint after service and a trial is set within twenty days after the court is advised that the lessee has filed an answer to the complaint.  In view of the speed with which an unlawful detainer action proceeds to trial, if a lessee has grievances against the lessor, the best course is to pay the rent to avoid the unlawful detainer action and then file a complaint against the lessor.

Can you file a complaint against the lessor in an unlawful detainer action (as a cross-complaint) so as to expedite a hearing about your grievances?  No.  Cross-complaints by a defendant in an unlawful detainer action are not permitted.

The moral of the story?  Equipment off-location has minimal value!  Give the payment of rent high priority or, if your economic future is bleak, seek the advice of a good lawyer before the process server knocks on your door!

[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 The Journal 
 Myles M. Mattenson © 2005