Quiet Enjoyment and Service Interruption Clauses

"Quiet" here has nothing to do with noise, at least not primarily. A FindLaw article by Ira Meislik explains that the law implies a covenant of quiet enjoyment into every lease, even one silent on the subject, and that it generally protects against interference with possession by the landlord, people acting under the landlord’s direction, or holders of paramount title. It usually does not cover interference from third parties.

Some states have gone further, according to the same article, and protect use and enjoyment as well as bare possession. Examples include blocking a tenant’s visibility or access, or allowing a neighbor’s noise to disrupt the business. The law differs significantly among states, and Meislik contrasts narrower and broader rulings from different states. Craig Tractenberg of Fox Rothschild, discussing Pennsylvania law, lists structural changes that reduce a property’s use, altered access or visibility, prolonged construction or noise, interrupted utilities and water intrusion as possible violations. Several problems together can support a finding even if none would alone.

Express wording matters. Meislik notes that the implied covenant applies only when the lease does not address the matter, that an express clause governs, and that it can limit the implied protection. Common limits include a condition that rent is paid, a clause making the lease subject to mortgages, and landlord renovation rights. Courts read the clauses together, so a provision elsewhere in the lease may defeat a claim.

Read the covenant last, after the entry, relocation, SNDA and services clauses. Those are where the protection tends to get carved away.

Tenants sometimes hear that if the building is unusable they can simply stop paying rent and leave. That is constructive eviction, and it is a high-stakes bet. Tractenberg describes it as a more severe form of breach, whose main consequence is suspension of the rent obligation, and explains that the tenant must actually leave within a reasonable time. Under the jury instruction he discusses from Pennsylvania, impairment need not be total, but the property’s usefulness must be substantially decreased. A tenant who vacates without a valid basis risks substantial liability.

Meislik calls the move "an all or nothing risk": if the claim fails, the tenant may still owe rent. His general advice is that a tenant in a dispute should usually keep paying and pursue damages or an injunction instead of abandoning the premises, unless success is clearly likely.

Do not stop paying or move out on the strength of a general guide like this one. Talk to an attorney licensed in the state first, and keep written records of the problem and of your notices to the landlord.

Landlord forms usually promise a list of services, then excuse the landlord when they fail. A lease may let the landlord stop service for accidents, emergencies, repairs or improvements, and may say an interruption alone does not allow termination. Damages are often limited as well. Hollander Real Estate Law notes that interruptions caused by providers or outside factors generally do not entitle tenants to abatement or termination, although relief may apply if the landlord was negligent.

So without specific language you may be left paying full rent in a space with no air conditioning, with a covenant claim you would have to litigate. A negotiated clause gives you a number of days and a result, without a lawsuit. Fox Rothschild’s article also notes that a commercial lease may limit damages, possibly excluding consequential damages, which leaves out-of-pocket remediation costs or partial rent abatement as the practical measures.

These terms can range widely. Some leases provide abatement after a short failure, others only after several consecutive business days, and some allow termination after a long interruption. Hollander also notes that a tenant is generally not entitled to abatement immediately when an interruption occurs, so notice and cure periods matter. These are the elements to address.

• ✓Which services are covered: HVAC, electricity, water, elevators, access, life safety, internet risers?
• ✓Does abatement start after a stated number of consecutive days, and are those business days or calendar days?
• ✓What is the trigger: untenantable, unable to use for normal business, or something narrower?
• ✓Does it apply only to causes within the landlord’s control, or also to failures it cannot control? Is a failure of its utility or contractor covered?
• ✓Does the clock start on our notice, and how do we give notice during an outage?
• ✓Does abatement cover all rent and charges, including operating expenses?
• ✓Does it cover the affected portion, or all the space if the remainder cannot practically be used?
• ✓Do we have the right to terminate after a longer stated period?
• ✓Can we perform an emergency repair ourselves and be reimbursed if the landlord does not act? Meislik suggests tenants negotiate self-help cure rights.
• ✓Is rent abatement our only remedy, or do we keep other rights?

Also review what the services are in the first place. Hours for HVAC, the cost of after-hours service, the number of elevators in operation, and any standard of performance should be stated. A landlord cannot be held to a standard that the lease never set.

1. Ask for an express covenant, and delete conditions that reduce it, such as one that lets any minor default end your protection.
2. Pair it with a non-disturbance agreement from the landlord’s lender. Meislik lists clauses making the lease subject to mortgages among the provisions that can limit the covenant, so your SNDA matters too.
3. Limit landlord renovation and access rights, so that the work does not undercut your use, and tie disruption to rent relief. Meislik suggests specifying renovation rights, closure limits and how damages will be calculated.
4. Line up the casualty and service interruption clauses, so that the same outage does not fall between them.
5. Set out what notice you must send, and to whom, for each kind of problem.
6. Make your business interruption insurance consistent with the waiting periods in the lease, and have your insurance broker check it.

Send written notice right away, following the lease’s notice clause, and keep sending it. Log dates, temperatures, photos, staff and customer impact, and repair responses. Keep paying rent unless your attorney advises otherwise. Ask for a repair date in writing. If your lease has an abatement or self-help right, follow its steps exactly.

Tenant Advisory Group represents tenants, and we negotiate services and interruption terms with the landlord as part of the business deal, since they affect your real cost of occupancy. Choosing a building with a good operating record helps too, which is why we also ask about how a building is managed during the search.