Davidow v. Inwood North Professional Group – Phase I

Nature of the Case

This was a dispute over an implied warranty for intended commercial use.

Facts

Inwood North Professional Group (P) sued Davidow (D) for unpaid rent on medical office space that Davidow leased from Inwood. Davidow had a five year lease with monthly rent of $800. The lease required Inwood to supply air conditioning, electricity, hot water, janitor and maintenance services, light fixtures, and security services.

Before long Davidow began to experience problems the with air conditioning, a leaky roof, and a rodent infestation. Hot water was not provided and Davidow went days without electricity because Inwood failed to pay the bill. After several burglaries, Davidow finally moved out with 14 months remaining on the lease.

At trial the jury found that Inwood had warranted that the premises were suitable for medical offices and that Inwood had breached that warranty. On appeal the court reversed, holding that Inwood’s covenant to repair was independent of Davidow’s covenant to pay rent, and that the implied warranty of habitability does not apply to commercial leases. Davidow appealed.

Issue

Is there an implied warranty of habitability and fitness for use in a commercial lease?

Holding and Rule of Law

Yes. There is an implied warranty of habitability and fitness for use in a commercial lease.

There is no valid reason to imply a warranty of habitability in residential leases and not in commercial leases. There are minor differences in these types of leases but that does not mean or demand that we apply different standards under modern law to each type of lease.

A commercial tenant desires to lease premises suitable for their intended commercial use. A commercial landlord impliedly represents that the premises are in fact suitable for that use and will remain in a suitable condition. The tenant’s obligation to pay rent and the landlord’s implied warranty of suitability are therefore mutually dependent.

The jury found that Inwood leased space to Davidow for a medical office and that the space was unsuitable because of acts and omissions by Inwood. Davidow was justified in abandoning the premises.

Disposition

Reversed and remanded.