Bar Exam — MBE (Multistate Bar Exam)Real PropertyMedium
A landlord leased a commercial property to a tenant for a term of five years. The lease agreement included a clause stating that the landlord would be responsible for all structural repairs to the building. Two years into the lease, the roof developed a major leak, causing significant damage to the tenant's inventory. The tenant notified the landlord, but the landlord refused to make the repairs, claiming financial hardship. Which of the following is the tenant's most appropriate remedy?
- ATerminate the lease immediately and vacate the premises without further rent obligation.
- BWithhold all future rent payments until the landlord makes the repairs.
- CMake the necessary repairs and deduct the cost from future rent payments.
- DSue the landlord for damages, including the cost of repairs and lost inventory.
Show answer & explanationAnswer & explanation
Correct answer: D. Sue the landlord for damages, including the cost of repairs and lost inventory.
In a commercial lease, a landlord's failure to perform a contractual repair duty typically constitutes a breach of contract, allowing the tenant to sue for damages. Self-help remedies like withholding rent or repairing and deducting are generally not permitted unless explicitly stated in the lease or by statute.
Why the other options are wrong
- A. While a material breach might allow termination, the tenant would typically need to prove constructive eviction, which requires vacating the premises. Simply terminating is not the 'most appropriate' initial remedy for a repair breach.
- B. Withholding rent is generally not allowed in commercial leases for repair breaches unless the lease or statute provides otherwise, and doing so could put the tenant in breach.
- C. The 'repair and deduct' remedy is typically for residential leases under implied warranty of habitability, or if expressly allowed by commercial lease or statute. It's not a default commercial remedy.
Landlord's Duty to Repair (Commercial Lease)
In commercial leases, the landlord's duty to repair typically arises from express covenants in the lease; breach leads to contractual remedies.
- No implied warranty of habitability in most commercial leases.
- Repair duties are usually specified in the lease agreement.
- Breach of a repair covenant allows tenant to sue for damages.
- Self-help remedies (repair and deduct, rent withholding) are generally not available unless specified by lease or statute.
Memory trick: Breach is Bad, But Remedies are Rules.