Wesson v. Leone Enterprises

Massachusetts Supreme Judicial Court · Property

PropertyCommercial leasesConstructive evictionDependent covenantscommercial leasedependent covenantsindependent covenantsconstructive eviction

Facts

The landlord leased commercial space in a multi-tenanted building to the tenant, a financial printing company, for a five-year term. In 1991, the tenant repeatedly complained of significant roof leaks, and although the landlord attempted repairs himself and through a roofer, the trial judge found the roof remained in disrepair and the repair efforts were shoddy and unsuccessful. The tenant protected its equipment and paper stock with plastic sheeting and later notified the landlord that it would vacate because of the leakage problem; it paid rent through December 1991. The judge found the landlord had a lease obligation to maintain the roof and awarded the tenant limited relocation damages.

Issue

Whether the evidence was sufficient to establish constructive eviction of the commercial tenant, and whether Massachusetts should abandon the common-law rule of independent covenants in commercial leases in favor of mutually dependent covenants permitting lease termination when the landlord breaches a significant promise after notice.

Rule

Except to the extent the parties validly agree otherwise, if a landlord fails to perform a valid promise in a commercial lease, and as a consequence the tenant is deprived of a significant inducement to making the lease, and the landlord does not perform within a reasonable time after being requested to do so, the tenant may terminate the lease. Under this rule, the tenant need not prove constructive eviction or that the premises were untenantable; it is enough that the breached promise constituted a substantial benefit understood at the time of contracting to be significant to the purpose of the lease.

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

In Worcester, Lila Mercado leased warehouse space from Harbor Mill Properties for a custom electronics assembly business. The lease required Harbor Mill to maintain the building's freight elevator; after repeated written complaints over two months, the elevator remained unusable, forcing workers to carry components up stairs at extra cost, but the business never stopped operating.

If Lila stops paying rent and terminates the lease, which argument best supports her right to do so?

Explanation. The majority adopted a dependent-covenants rule for commercial leases: unless the parties validly agree otherwise, a tenant may terminate when the landlord fails to perform a valid promise in the lease, the breach deprives the tenant of a significant inducement to making the lease—interpreted as a substantial benefit significant to the lease's purpose—and the landlord does not cure within a reasonable time after request. The tenant need not prove constructive eviction or total untenantability.