While commercial leases generally favor the landlord, the covenant of quiet enjoyment, explained in this article, is one of the most important tools a commercial tenant can use to protect the expected benefit of a lease. Residential tenants can rely on tenant-friendly laws to protect their rights, but commercial tenants must look to the lease or implied covenant of quiet enjoyment. A covenant is a promise, and in a lease, both parties make covenants that govern their behavior. In the case of quiet enjoyment, the covenant provides the tenant with the right to use the rental for its intended purpose, and prevents the landlord from unreasonably disturbing that use.
Tenants are entitled to “quietly enjoy” a leased premises. Quiet enjoyment can include the right to exclude others from the premises, the right to peace and quiet, the right to a habitable premises, the right to basic services such as heat and hot water, and, for high-rise buildings, elevator service. Egregious behavior on the part of the landlord can result in the breach of this implied covenant. For example, some common violations of the covenant include:
- Entering the rented premises too often or without serving proper notice.
- Failing to keep disruptive noises, nuisances, or behaviors under control.
- Harassing a tenant.
- Restricting essential services like electricity and hot water.
- Failing to provide items and services that were promised in the lease or rental agreement.
- Failure to make the premises habitable.
Particularly in the uncertain time of COVID-19, commercial tenants should take the time to understand their rights in order to maximize benefits and protections. To understand these rights, tenants should look to the implied covenant or to the lease itself, depending on whether it includes a written clause on quiet enjoyment.
If there is not a specifically defined covenant in the contract, the covenant is often implied by law. Generally, there is an implied covenant of quiet enjoyment in every lease of property. An implied covenant is an agreement that is not specifically stated in a contractual agreement. This means that even if a lease agreement does not expressly state the covenant, a court may still recognize and apply it, and the tenant can still benefit from its protections.
Contracting to Protect the Right
This covenant can also be expressed in the lease. A written covenant will supersede the implied covenant. This means that tenants can add quiet enjoyment protections, or tailor them to the specific circumstances that apply to the lease. Therefore, although commercial leases are often drafted for the benefit of the landlord, tenants can equalize the playing field by paying close attention to the terms of the landlord’s covenant of quiet enjoyment. Importantly, a landlord generally cannot force a tenant to waive the covenant or make it conditional.
What Remedies are Available?
When the landlord breaches the covenant, a tenant might have the following options: (1) terminating the lease agreement; (2) moving out; or (3) requesting rental abatement. A rental abatement will eliminate or decrease the amount of rent a tenant must pay, to account for lost enjoyment of the property. However, because a court must ultimately decide whether there was a breach, tenants must be careful when choosing the appropriate remedy. For example, a tenant who confidently moves out, or stops paying rent, based on a disturbance may later face larger costs, in the event that a court decides that the landlord did not breach the covenant.
Common Issues in Enforcing the Right
While there are remedies available to commercial lease tenants, several complexities can arise when a tenant tries to enforce these remedies. For example:
- Act of someone other than landlord: While the covenant applies to the landlord or anyone acting on their behalf, it does not make a landlord responsible for disturbances caused by others.
- Act of God: Courts agree that some events are simply out of the landlord’s control. Typically, landlords will not be held responsible for those disturbances. However, do not assume a landlord complied with the covenant merely because an inevitable event occurred. Such a landlord may have had a duty to prepare for or mitigate inevitable disturbances.
- Act not arising to constructive eviction: Defining the term “quiet enjoyment” can be tricky because the definition is dependent upon the circumstances. Also, the terms “quiet” and “enjoyment” are relative, depending upon the tenant or type of business contemplated in the lease agreement. It may be difficult to predict where a court will draw the line between an inconvenience and a breach of the covenant.
- Act of consent: If a tenant decides to leave the property too late after a disturbance has begun, the court may decide that the tenant has consented to the interferences or waived its right to complain about them.
As can be seen, the covenant of quiet enjoyment covers a variety of complex issues. Disputes between tenants, or between tenants and landlords, can become aggressive and are often difficult to resolve. Additionally, tenants oftentimes do not have the necessary funds to address quiet enjoyment issues, or to relocate to a new property.
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Rachel Stuhr, Esq. Attorney