Terry v. O'Brien

Supreme Court of Vermont · 2015 · Property

130 A.3d 780 (Vt. 2015)

Updated July 23, 2026

PropertyLandlord-tenantWarranty of habitabilityConsumer Protection Acthabitabilityactual noticelatent defectslandlord knowledge

Facts

Tenants rented a Burlington house owned by landlords under an oral agreement and later paid monthly rent. After various code-enforcement inspections over the years, a 2008 fire began in the attic at an electrical splice connecting knob-and-tube wiring to Romex wiring, with the splice buried in cellulose insulation. The fire investigator concluded the fire resulted from a combination of load on the older electrical system, moisture from insulation, and the inability of the knob-and-tube wiring to shed heat. The trial court instructed the jury that tenants need not give prior actual notice for this latent wiring defect on the habitability claim and that renting any non-code-compliant residence was a deceptive act under the CPA even without landlord knowledge.

Issue

Whether the trial court erred by instructing the jury that landlords could be liable under the statutory warranty of habitability for a latent defect without actual notice, and by instructing that renting any non-code-compliant residence automatically violated the CPA without requiring materiality or landlord knowledge. The court also considered whether the unpaid-rent award and attorney's fee rulings could stand.

Rule

Under 9 V.S.A. § 4458(a), a tenant seeking relief for breach of the statutory warranty of habitability must show that the landlord failed to comply within a reasonable time after receiving actual notice of a noncompliance materially affecting health and safety; the statute does not impose strict liability for latent defects unknown to the landlord. For a CPA claim based on a landlord's failure to disclose code violations affecting habitability, the tenant must prove a material representation or omission likely to mislead a reasonable consumer and must show that the landlord knew or should have known of the defect, although intent to deceive is unnecessary.

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One of 10 multiple-choice questions for this case. Pick an answer to see why.

Nina Lopez rented a duplex in Montpelier from Cedar Hollow Properties. Months later, a hidden defect in the crawl-space wiring caused a small fire, and Nina sued under Vermont’s statutory warranty of habitability after proving the wiring materially affected health and safety; neither Nina, any inspector, nor any government office had ever given the landlord written notice of that wiring problem, and the landlord had no actual notice from any source.

On Nina’s statutory habitability claim for damages under 9 V.S.A. § 4458(a), what is the strongest argument for the landlord?

Explanation. Under the majority opinion, § 4458(a) requires actual notice of a noncompliance materially affecting health and safety before statutory habitability remedies are available. The court rejected an instruction allowing liability for a latent defect when the landlord lacked actual notice from the tenant, a governmental entity, or another source. The statute does not impose strict liability for unknown latent defects.