Sunday, May 18, 2014

MBE Fast Fact: Warranty of Habitability

The warranty of habitability seems to pop up quite a lot in Real Property questions. It's easy enough to understand that the warranty places burdens on the landlord, and those burdens are imposed regardless of whether the landlord agrees to them in the contract between the landlord and tenant. But the questions will require that you understand specifically which obligations this warranty covers, as well as how it affects the other rights and obligations of both the landlord and tenant. Be sure to know the following:

The warranty generally only applies to residential tenancies (as opposed to commercial tenancies). Essentially, the warranty is an unstated guarantee that a rental property meets basic living and safety standards. So, when a tenant rents an apartment, for example, an implied warranty of habitability requires that the unit will have hot water, a working electrical system, heat in the winter, lockable doors and windows, etc. And what happens if the landlord breaches this warranty?

The tenant has a few options here. One option is to terminate the lease, but if termination is not desired, the tenant can make repairs and then offset the cost against future rent obligations. Another option is to forgo making the repairs and to abate the rent to an amount equal to the fair market value of the defective property. (Though this option is far less desirable depending upon the specific defects.) Finally, the tenant has the option to remain in possession, pay full rent, and then seek damages directly from the landlord.

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