Whether in a commercial or residential lease, quiet enjoyment is the most fundamental and often misunderstood right obtained by a tenant.
Many have experienced the situation when loud music or voices have emanated from a neighbouring unit. If banging on the walls, speaking to the property manager or calling the police does not help, is the landlord in breach of its obligation? Is this what is meant by quiet enjoyment?
The covenant of quiet enjoyment means more than just a noise-free environment. It is a more onerous obligation that provides that the landlord will not interfere with a tenant’s right of possession. This covenant has two components:
1. The landlord has good title to the premises, and therefore can lawfully enter into the lease with the tenant, and
2. The landlord will not interfere with the tenant’s enjoyment of the leased premises.
In most leases the covenant is written in the lease document, setting out the parameters for quiet enjoyment.
A tenant is entitled to exclusive possession of the leased premises, without the permission of anyone else. If the tenant needs approval before entering the premises, then the landlord did not have right to grant the exclusive possession to the tenant. The landlord may then be in breach of its covenant.
In order to ensure that the landlord can validly enter into the lease, a tenant should examine the title to the landlord’s property in order to confirm ownership. This can be done by way of a subsearch of title at the lawyer’s office or a review of the records of the land registry office. The subsearch should confirm that the owner of the property is the landlord as its name is indicated on the lease document. If this is not the case, the tenant should seek clarification. A subsearch would also show whether there are third-parties with an interest in the landlord’s property, for example, if there is a mortgage on title. This may become significant in the event of default by the landlord, as the lender may be able to step into the landlord’s shoes or in some cases terminate the lease before the end of the lease term.
There is no clear-cut test to determine whether a landlord has interfered with the tenant’s quiet enjoyment. This issue has gone before the Courts numerous times, but the case law in this area is inconsistent. The following are situations where the Courts have found that the landlord’s actions constituted a substantial interference with the tenant’s quiet enjoyment: a landlord erecting scaffolding in front of a tenant’s store interfering with the tenant’s business, a landlord creating a substantial amount of dirt and dust while undertaking renovations to another unit, a landlord undertaking unannounced and periodic inspections of a tenant’s premise, and consistent interruptions to gas and electricity supply. A breach of the covenant may not be found in all cases. Generally when the interruption is foreseeable or when reasonable care has not been exercised, the landlord may be deemed to have interfered with the tenant’s quiet enjoyment.
It should be noted that the interruption must be more than just an inconvenience or annoyance and, in most cases, must have a physical element to the interference.
What to do if the landlord is in breach?
When a tenant alleges breach of the covenant of quiet enjoyment, the tenant must choose an appropriate remedy while at the same time avoiding liability under the lease. A tenant may want to stop rent payments until the interference is remedied, with the obligation resuming once the landlord is no longer in breach. Stopping payment of rent is not something that should be taken lightly, and a tenant should consider whether the breach warrants this type of action. It may incite the landlord to claim non-payment of rent or terminate the lease. Accordingly, interrupting rent payments is an action that should never be undertaken without consulting legal counsel.
A tenant may also consider whether to claim damages for abatement of rent, loss of profits, out of pocket expenses, or other damages that flow from the breach. In considering the best course of action, the tenant should also consider whether it wishes to keep the leased premises or terminate the lease.
In the end, if there is a situation that you are unhappy with, you may not have to simply grin and bear it. The right to quiet enjoyment gives a tenant the ability to fight back. However, the fight should not be pursued without professional guidance.
Meredith J. Serota is an associate with BrazeauSeller LLP. Meredith’s practice focuses mainly on Corporate/Commercial transactions, as well as commercial real estate. BrazeauSeller.LLP is an Ottawa business law firm that provides expert legal counsel, innovative solutions and responsive service to its clients. As the exclusive Ottawa member of Meritas Law Firms Worldwide, BrazeauSeller is able to provide its clients with access to trusted, dependable legal representation anywhere in the world, that their business takes them. (613) 237-4000 http://ww.brazeauseller.com