The covenant of quiet enjoyment

The meaning of this covenant, the protections it confers and the allegation of certain conditions precedent in order to prevail on a claim for the breach of this covenant. Most commercial leases contain a provision entitled "quiet enjoyment". This provision entitles a commercial tenant to "peaceably and quietly" enjoy its rented space, provided that it has satisfied all of its obligations to the landlord as defined by the lease, including the payment of all rent and additional rent charges. Notwithstanding this rather simplistic lease covenant, many commercial tenants still question its applicability and the type of protection it may offer to them. Conversely, while most landlords are well-versed in the meaning of this lease clause, they are uncertain as to how a tenant can successfully prevail against them on a claim for a breach of this covenant. The covenant of quiet enjoyment is implied into every lease, although most commercial leases contain a provision dealing directly with this covenant. The covenant of "quiet enjoyment" entitles the lessee to the quiet enjoyment of the demised premises. Put another way, this covenant permits the tenant to use the premises in any lawful manner and in any way that the landlord could have used the premises for itself. At times, a commercial tenant is unable to "quietly enjoy" possession, and under these circumstances, it may be able to assert claims against its landlord for breach of the covenant of quiet enjoyment (or raise the breach of this covenant as a defense to a summary nonpayment proceeding). Significantly, a tenant cannot prevail upon a claim for breach of this covenant unless it can demonstrate that it was actually or constructively evicted from its premises and that it has complied with all of its obligations under the lease, including the payment of rent. An actual eviction takes place when the landlord has wrongfully ousted the tenant from physical possession of all, or a portion, of the premises. A constructive eviction, on the other hand, occurs where the landlord's wrongful acts substantially and materially deprive the tenant of the beneficial use and enjoyment of the leased premises. A constructive eviction does not require a tenant's physical removal from the premises, and it is sufficient for a tenant to demonstrate that it could not use the premises for the purpose intended and had to abandon the premises as a result thereof. The measure of damages in quiet enjoyment cases is, assuming all rent has been paid in full, a judgment for the rent attributable to the portion of the premises from which the tenant was evicted (or the difference between the rent reserved in the lease and the rental value of the premises in their current state). The courts in this jurisdiction are not reticent when it comes to upholding a claim against a landlord for breach of the covenant of quiet enjoyment. By way of example, courts have found in a commercial tenant's favor on a breach of this covenant when a commercial landlord changed a tenant's locks; refused to permit entry to a building during non-business hours; deprived a tenant of the use of parking spaces; and reclaimed a portion of the tenant's space for its own use (all actual evictions). The courts have also found a breach where a landlord forced a pizzeria to vacate its space because of the landlord's failure to effectuate the requisite repairs which adversely impacted upon the tenant's ability to conduct its business (a constructive eviction). A breach of the covenant of quiet enjoyment was not upheld, however, where a restaurant tenant (Hooters) was forced to operate its business with a sidewalk shed and scaffolding and construction debris (the tenant did not set forth an allegation of an eviction, partial or constructive) or where a drug store (Duane Reade) suffered business interruption loss and property damage due to water leakage and a burst pipe from construction in the building (and again, no eviction occurred). The bottom line is that both landlords and tenants should have a basic comprehension of the covenant of quiet enjoyment, as this clause is part and parcel of every commercial lease. A commercial tenant should be aware of the protections that this clause affords it, as well as the conditions precedent it must allege in order to prevail upon such a claim. A landlord should recognize that a tenant cannot successfully assert a claim for a breach of this covenant without first alleging an eviction, actual or constructive, and a compliance with all lease obligations, including the payment of rent. Andrea Lawrence is senior counsel for Epstein Becker Green, New York, N.Y.