Leases: consent to assignment, the warranty of habitability, constructive eviction, and self-help

Black-letter propositions

1. 01

   In the minority view adopted in California, when a lease requires the landlord's consent to an assignment, consent may be withheld only where the landlord has a commercially reasonable objection to the assignment, even if the lease does not say that consent will not be unreasonably withheld.

2. 02

   A landlord's denial of consent solely on personal taste, convenience, or sensibility, or to charge a higher rent than originally agreed, has been held arbitrary and not commercially reasonable.

3. 03

   Under the majority common-law view, a landlord could arbitrarily refuse consent to an assignment where the lease required consent and did not say that consent would not be unreasonably withheld, so the answer depends on the jurisdiction.

4. 04

   A warranty of habitability, measured by the housing regulations, is implied by operation of law into leases of urban dwelling units, and its breach gives rise to the usual remedies for breach of contract, including the tenant's use of the breach as a defense to a suit for possession for nonpayment of rent.

5. 05

   Under North Carolina law a residential landlord must comply with applicable building and housing codes, make all repairs and do whatever is necessary to keep the premises in a fit and habitable condition, keep common areas safe, and maintain electrical, plumbing, heating, and other supplied facilities after written notice of needed repairs except in emergencies.

6. 06

   Any act or omission of the landlord, or of someone acting under the landlord's authority or having superior title, that renders the premises substantially unsuitable for their leased purpose or seriously interferes with the beneficial enjoyment of the premises breaches the covenant of quiet enjoyment and is a constructive eviction.

7. 07

   A tenant's right to claim constructive eviction is lost if the tenant does not vacate within a reasonable time after the right arises, what is reasonable depends on the circumstances, and a tenant who vacates does so at his peril because a court may later find the landlord's conduct did not amount to constructive eviction.

8. 08

   If a landlord removes or attempts to remove a residential tenant in any manner contrary to the North Carolina statute, the tenant may recover possession or terminate the lease, and the landlord is liable for actual damages caused by the removal or attempted removal, but not punitive or treble damages.

9. 09

   A North Carolina landlord who seizes a tenant's personal property or interferes with access to it other than as the statute allows is liable to the tenant for its value or for its return.

10. 10

    A North Carolina tenant who holds over after the term expires and after demand for surrender may be removed in the manner the statute prescribes, and a lease with a fixed rent date implies a forfeiture if rent is not paid within 10 days after demand.

Use this attack sequence under time

Common wrong turns

• A tenant who stays too long after the deprivation may lose the constructive eviction claim.
• A landlord's refusal of consent for a reason unrelated to the assignee may be unreasonable in states following the minority rule.
• Self-help removal, such as changing the locks, exposes a residential landlord to liability under the North Carolina statute.
• A repair duty for facilities such as heating depends on written notice from the tenant, except in emergencies.

Worked example

A commercial tenant's lease requires the landlord's written consent to assignment and says nothing else. The tenant finds a solvent assignee, and the landlord refuses only because it wants to raise the rent for a new lease. The jurisdiction follows the minority view.

Practice this topic

Assignment and consent

Kendall v. Ernest Pestana adopted the minority rule that where a lease provides for assignment only with the lessor's prior consent, the consent may be withheld only where the lessor has a commercially reasonable objection to the assignment, even in the absence of a provision that consent will not be unreasonably withheld, and the opinion noted that the traditional majority rule allowed arbitrary refusal and that lower courts had held denial based on personal taste, convenience, or a desire for higher rent to be arbitrary.

Habitability and constructive eviction

Javins v. First National Realty Corp. held that a warranty of habitability, measured by the standards of the District of Columbia Housing Regulations, is implied by operation of law into leases of urban dwelling units covered by those regulations and that breach gives rise to the usual remedies for breach of contract, in a case in which tenants sued for possession for unpaid rent alleged numerous violations. North Carolina General Statutes section 42-42 requires a residential landlord to comply with the housing codes, make all repairs necessary to keep the premises fit and habitable, keep common areas safe, and maintain supplied facilities after written notice.

Reste Realty Corp. v. Cooper held that any act or omission of the landlord that renders the premises substantially unsuitable for the purpose for which they are leased, or that seriously interferes with the beneficial enjoyment of the premises, is a breach of the covenant of quiet enjoyment and constitutes a constructive eviction, that the right is lost if the tenant does not vacate within a reasonable time, that reasonableness depends on the circumstances, and that a tenant who vacates does so at his peril.

Removal and remedies

North Carolina General Statutes section 42-25.9(a) provides that if a landlord removes or attempts to remove a tenant from a dwelling unit in any manner contrary to the Article, the tenant may recover possession or terminate the lease and the landlord is liable for actual damages, and section 42-25.9(b) provides that a landlord who seizes possession of or interferes with the tenant's access to personal property other than as the statute permits is liable for actual damages and for its return or value.

Section 42-26 provides that a tenant who holds over after the term expires and after demand for surrender may be removed in the manner the statute prescribes, and section 42-3 implies a forfeiture of the term for failure to pay rent within 10 days after demand where rent is due at a fixed time.

Frequently asked questions