What Is This Thing Called Quiet Enjoyment?

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Ruminations doubts that most readers know what is really meant by the “covenant of quiet enjoyment.” Understandably so. Because quiet enjoyment is a common law concept; case law being the sole source of its definition. The definitions constructed in real property treatises come from case law. Even in civil code jurisdictions, where an implied covenant of quiet enjoyment in leases is imposed by statute, the definition of quiet enjoyment is found only in case law. The Restatement (Second) of Property – Landlord and Tenant tells where the law is going, or where its authors think is ought to be going, not where it is.

[For reasons hinted at the end of this posting, Ruminations will sound a lot more lawyer-like than usual today. Don’t let that confuse you. Our website’s disclaimer is still very much in effect.]

[Also, the “quiet” in “quiet enjoyment” has nothing to do with decibel levels, and the “enjoyment” has nothing to do with pleasure.]

Dealing with quiet enjoyment would be a lot easier if the concept was implicated and analyzed in only a small number of well reasoned opinions which were consistent both over time and from state to state. Alas, were that the case. Anyone who has ever searched cases for a point and come up dry should remember the ancient Chinese proverb, “be careful what you wish for, you may get it.” Thousands of reported cases deal with the covenant of quiet enjoyment.

Defining the problem is not the sole challenge. The law varies greatly from state to state. Common law did not distinguish between residential and commercial leases, but modern law does. The law of quiet enjoyment is changing quickly in some jurisdictions, but not in others. The covenant of quiet enjoyment now means something different in deeds than it means in leases (although some judges are having problems with the differences).

Cases involving quiet enjoyment as an implied covenant vastly outnumber those dealing with it as an express covenant, but one can reasonably surmise that, in most situations, the lease involved in each case contained an express quiet enjoyment provision. Most cases slur distinctions between concepts of constructive eviction and those of quiet enjoyment, probably because almost all tenant’s attorneys choose to plead both of them as defenses and as causes of action. Speaking of defenses, most claims of breach of the covenant of quiet enjoyment arise as a tenant’s defense against a rent action. In those cases, it frequently isn’t hard to discern that a scream of “breach of quiet enjoyment” is a sign of a more fundamental breakdown of the landlord-tenant relationship. Lastly, breach of the covenant of quiet enjoyment is a catchall claim when neither the tenant nor the court can find an express lease term that has been violated.

With all of that as background, we’ll now try to cut a path through the thicket and create a guide to understanding just what is meant by the “covenant of quiet enjoyment” and where that concept is going. It won’t be easy. Some states haven’t moved out of the nineteenth or twentieth century. Not all states now holding a “modern” view got there gradually. Some courts just got tired of the “old” law and took a leap forward. Therefore, it is critical to know where the law is going, because, in drafting leases and in resolving simmering disputes, yesterday’s ruling may not be today’s “law of the case.”

What Is It?

Over the term of a lease, there are times when a landlord may interfere with its tenant’s actual or hoped-for use of the leased premises. Not every one of these interferences will be found to be a breach of an express covenant in the lease. Nonetheless, the tenant’s ability to use and enjoy the premises may have been permanently and intentionally harmed by an act of the landlord or of someone for whose conduct the landlord is responsible. It is for such cases that the law implies a special covenant in every lease —the covenant of quiet enjoyment. This covenant exists even if the lease is silent on the subject. In fact, the presence of an express covenant of quiet enjoyment in a lease actually serves to limit, not expand, a tenant’s rights.

The covenant of quiet enjoyment means different things in different places, at different times, and in different settings. What’s worse, every court speaks as if everyone knows, or should know, which of these meanings is supposed to apply to the case at bar, a practice which makes for great difficulty in trying to write a clear, “user friendly” guide to the subject. What is more, application of the covenant depends on time and place —time, because the coverage of the covenant is expanding with the modernization of real property law; and place, because some jurisdictions are still years and even decades behind this trend.

Nothing can illustrate this point better than a comparison of two rulings from 1995, when Ohio and New Hampshire looked at the same problem and came to very different conclusions. The Ohio court [in Doll v. Rapp, 660 N.E.2d 542 (Ohio Mun. 1995)] wrote:

Moreover, under the law, ‘a covenant of quiet enjoyment is [only] an assurance against a defective title * * *. It goes to possession.’ [citations omitted] Thus, there is no breach of the covenant for quiet enjoyment unless there be actual constructive eviction of the lessee. [citations omitted].

* * *

Further, under the law of Ohio, a commercial landlord does not impliedly warrant that commercially leased premises would be suitable for a particular intended purpose. … Thus the law in Ohio is harsh toward commercial tenants.

* * *

The law in Ohio in essence requires a commercial tenant to vacate the premises before becoming entitled to recover damages for breach of the covenants of quiet enjoyment or habitability, if any.

At the same time that the Ohio courts had that to say, the courts in New Hampshire [in the opinion: HERE] expressed the following thoughts:

The complexities, interconnectedness, and sheer density of modern society create many more ways in which a landlord or his agents may potentially interfere with a tenant’s use and enjoyment of leased premises. Even without rising to the level of a constructive eviction and requiring the tenant to vacate the premises, such interferences may deprive the tenant of expectations under the lease and reduce the value of the lease, requiring in fairness an award of compensatory damages. Moreover, under modern business conditions, there is ‘no reason why a lessee, after establishing itself on the leased premises, should be forced to await eviction by the lessor or surrender the premises, often at great loss, before claiming a breach of the covenant for interference with the use and possession of the premises’ that is not substantial enough to rise to the level of a total eviction. [citations omitted] Likewise, the landlord’s greater level of knowledge of and control over the leased premises and the surrounding property militates in favor of a more modern view of the covenant of quiet enjoyment than the trial court adopted.

* * *

We note, however, that our holding as to the definition of a covenant of quiet enjoyment effects a change in the common law in New Hampshire… .

So, what does this teach us? The law on one side of the fence may be radically different from that on the other. But don’t despair, the fences are coming down.

Let’s Start Again

It is now universally agreed that breach of the covenant of quiet enjoyment involves an interference with possession of the premises by a landlord, persons under the landlord’s direction or paramount title holders, but not interferences by third parties. This is because all jurisdictions at one time viewed leases as instruments of conveyance and not as contracts. Since the covenant of quiet enjoyment is present both in leases and in deeds and easements, courts are prone to further confuse the whole subject matter by failing to distinguish leasehold interests from fee and other real property interests. On the other hand, jurisdictions on the leading edge of change have expanded the covenant to guard against interference with “use and enjoyment” of the leased premises.

Confused? That’s no surprise! “Interference with use and enjoyment,” a mantra frequently mouthed by judges and commentators, just doesn’t seem to help define the covenant of quiet enjoyment. After all, not all of the plethora of ways in which a landlord can interfere with its tenant’s use and enjoyment of the premises amount to a breach of the covenant of quiet enjoyment.

A Start Toward Reconciliation

Every definition of the covenant incorporates the concept that breaching it involves an interference with the tenant’s rights. The key word is “interference,” a word susceptible to a number of definitions, all of which may create an actionable claim. Here’s a list of interferences starting at the most obvious and working toward the least: actual eviction; actual partial eviction; constructive eviction; partial constructive eviction; breach of the covenant of quiet enjoyment; and breach of an implied warranty of suitability. At one end, we see a clear and absolute deprivation of physical possession. At the other end of the range, interference with a tenant’s enjoyment or use of its premises may be tantamount to depriving a tenant of its physical possession.

Here’s a practice tip: don’t tell a tenant that it has a good case of “breach of the covenant of quiet enjoyment” just because a landlord has engaged in some physical interference with that tenant’s ability to use the leased premises. Carefully research the issue in that particular state because most states haven’t yet “gotten there” and those that have will be found to have erected fairly high barriers – “possible, but improbable.”

Simply speaking, every unjustified eviction, actual or constructive, total or partial, is a breach of the covenant. On the other hand, not every breach of the covenant of quiet enjoyment will constitute an eviction in every jurisdiction.

Not every interference with use and enjoyment will rise to the status of an constructive eviction. Trivial or temporary acts, although unwarranted, if not intended to be a permanent expulsion, do not amount to an eviction. The outcome depends on the materiality of the deprivation; if the deprivation is trifling or produces no inconvenience, it does not constitute an eviction. Now, there’s the rub! For a tenant to claim constructive eviction, it must abandon the leased premises. No matter how great the disturbance, the tenant must leave by reason of the very interference that gave rise to the claim of a constructive eviction. Moreover, even in the case of a partial constructive eviction, the tenant must abandon the entire premises. Not only that, but the abandonment must take place within a reasonable time.

Try to understand the dilemma faced by a tenant. Imagine a tenant who thinks it is being substantially deprived of the core benefits of use and enjoyment for which it bargained when it signed its lease. Imagine, also, that by reason of an intentional act on the part of its landlord (or someone for whose acts the landlord is responsible), the tenant believes that its use and enjoyment have been taken away. It can’t find an express term of the lease that the landlord has violated. Therefore it must seek relief for a breach of some landlord’s obligation imposed by law. Based upon its analysis of the situation, it chooses to claim that it has been constructively evicted.

If the tenant can’t prove its claim, it is both out of the premises and still obligated to pay the rent (and possibly other damages as well). To claim constructive eviction, it must vacate the premises within a reasonable time. If it elects to stay in the premises, a tenant cannot avoid its rent obligations. If a court believes that the tenant has delayed its abandonment, it also loses. Its lease may limit its remedies by expressly prohibiting a claim of eviction. In essence, under the doctrine of constructive eviction, a tenant must take an all or nothing risk.

Express vs. Implied Covenant

If a covenant of quiet enjoyment is implied in every lease, why do leases almost always contain an express covenant? The answer, quite simply, is because landlords write the leases. A Colorado court has said that “[i]n the absence of an agreement to the contrary, there is an implied covenant of quiet enjoyment of leased premises and the tenant is entitled to possession of the premises to the exclusion of the landlord.” The corollary of this is that the parties can agree to eliminate the implied covenant of quiet enjoyment. If parties can eliminate the covenant entirely, they can certainly limit it. If a lease contains an express covenant, the express clause governs and abrogates any implied covenant of quiet enjoyment. The Restatement (Second) of Property 5.6 concurs that “[t]he parties to a lease may agree to increase or decrease what would otherwise be the obligations of the landlord with respect to the condition of the leased property and may agree to expand or contract what would otherwise be the remedies available to the tenant for the breach of those obligations, and those agreements are valid and binding on the parties to the lease unless they are unenforceable in whole or in part because they are unconscionable or against public policy.” Even where statutory, such as in California, the covenant of quiet enjoyment can be modified or waived by a commercial tenant.

Accordingly, counsel for landlords and tenants alike should be alert to the limitations written into express covenant of quiet enjoyment clauses and the interplay of quiet enjoyment with all other express terms of a lease. Intelligent and careful drafting will result in each party enjoying the benefit of its bargain. Why is Ruminations beating around the bushes (a preamble to cutting to the chase and capturing the birds)? We’re afraid to say that the common lease provision saying, “Landlord covenants that if, and so long as, Tenant pays the Basic Rent and all Additional Rent as herein provided, and performs the covenants hereof, Landlord will do nothing to affect the Tenant’s right to peaceably and quietly have, hold, and enjoy the Demised Premises for the Term, subject to the Lease provisions and to any mortgage to which this Lease is subordinate,” takes away a tenant’s rights rather than gives rights to the tenant. [That’s a nugget to chew on for those readers who got this far.]

[Suspecting that at least one astute reader will know that today’s posting is merely a shortened update of a much longer 1997 article that can be found by clicking HERE: we confess, thus making it “old news.”]

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Comments

  1. Ira,

    Great article.

    Past experience in dealing with more sophisticated tenants, this issue seems to arise with more concerns regarding the lender rather than the landlord. A lot of those lease agreement negotiations have to do with a request of the tenant to ensure that they will continue to “enjoy” their Premises even if the lender forecloses on the landlord over other issues beyond the control of the tenant.

    Maybe another topic for another day.

    Best wishes.

  2. Ira. Following is a clause we see all of the time.

    Upon payment by Tenant of the rents herein provided, and upon the observance and performance of all covenants, terms and conditions on Tenant’s part to be observed and performed, Tenant shall peaceably and quietly hold and enjoy the Leased Premises for the term hereby demised without hindrance or interruption by Landlord or any other person or persons LAWFULLY OR EQUITABLY claiming by, through or under Landlord, subject, nevertheless, to the terms and conditions of this Lease and any mortgage, deed of trust or underlying lease to which this Lease is subordinate.

    Can you tell me why the capitalized words: “lawfully or equitably” are in there? What is their function? Does this mean that Landlord will only defend my good title if some claimant has a legal or equitable claim but not the claim of a crazy person?

    • Those terms might be unfamiliar in a (Spanish) Civil Code state such as your home one, California. The two categories come out of English Common Law. A long time ago in Merry Olde England, to get relief from a court, your complaint had to fit one of a number of “pattern” complaints, called: “Writs.” They were “rigid forms for relief.” There were writs for contract claims and for tort claims, but not for much else. Think: “Writ of Replevin.” Apparently that’s all the King would trust his judges to handle. Think: “Bank Teller.” So, if you wanted the King’s forces to stop someone from doing something or wanted those forces to make someone do something (think, by example” Injunction”), you need to see the King and ask him to do “equity.” That’s because the “Law” courts didn’t have the power to do anything not the subject of a Writ and, for the most part, Writs got the successful claimant money. When the King got tired of hearing all of these “Pleas” for equitable relief, he appointed a “Chancellor” to hear and decide on such claims. Hence, we got the Chancery Court to supplement the Law Court. When someone acts under the order of the Law Courts, she or he is acting under “Law” (or, lawfully). When acting under an order from the Chancery Courts, she or he is acting under “Equity” (or, equitably). In New Jersey, there were two such distinct courts until the 1947 Constitution was adopted and the two courts were merged. In our court of original jurisdiction, the Superior Court, there is a Law Division and a Chancery Division and, although certain cases are directed to one and not the other division, all judges of the Superior Court are able to decide matters of Law or Equity.

      • As an ex-Philadelphia lawyer I understood the origins of “equity” vs. “law” courts. My question was why does that capitalized phrase in my original post appear in the Quiet Enjoyment clause?

        • My reply, replying being a rare public act of mine on this blog site, was more for the benefit of the many non-lawyers who reach this page, than for you or most of our colleagues. It also showed that I didn’t absorb the true sense of your question.

          The take-away from this week’s blog, if there was one, is that when an express quiet enjoyment provision is included in a lease it is there, intentionally or unintentionally, to limit a tenant’s claims. There is a covenenant of quiet enjoyment implied in every lease. Thus, every included condition in the express provision should be viewed as a limitation, not an expansion, of a tenant’s available rights or remedies.

          In your example, I would conjecture that the effect of limiting the tenant’s claims for acts of others to those that are exercised lawfully by others (whether under law or equity), is to protect the landlord from a tenant’s claim when that tenant’s possession is unlawfully interupted by a third party, such as by the street gang that leases the adjacent space and which breaks through the wall forcing the aggrieved tenant out of its leased space.

          I don’t know if the draftsperson had that in mind or was just following the somewhat disturbing practice of adding words that sound legal in an attempt to match what the draftperson thinks an enfoceable agreement should “sound” like, or it was done with full knowledge of the possible limiting effect.

          I’m not aware of any case that holds the implied covenant of quiet enjoyment is not modifiable or that, absent express language saying so, it would be implied “in addition to” what a lease might say about quiet enjoyment.

          • I suspect that long ago some lawyer, being a wiseguy, inserted this phrase for the very reason you describe. And as often happens, that phrase spread like a contagion into everyone’s lease form and has remained so long after everyone has forgotten what it means or how it got there.

  3. Too many tenants, especially mom n pops, are asked to sign SNDA’s or straight subordination agreements that confer far more rights to the lender than the Landlord has in the lease. Admittedly, a foreclosure is not ‘typical’ but more and more banks seem to be trying to ‘game’ the system by egregious clauses in their SNDA requests, essentially sabotaging almost all quiet enjoyment rights if the tenant does not call them on the language

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