251 A.2d 268 (N.J. 1969)
In May 1958, Joy M. Cooper leased a portion of the ground floor of a commercial building at 207 Union Street, Hackensack, New Jersey, from the predecessor in title to Reste Realty Corp.1
After about a year of occupancy, the parties executed a new five-year lease in April 1959 covering the entire ground floor except the furnace room for use as commercial offices in connection with a jewelry firm's sales training and meetings.2
A driveway ran along the north side of the building.3 During the first year of occupancy, rainwater ran off the driveway into the leased offices whenever it rained.4 Arthur A. Donigian, an officer and resident manager of the corporate owner who also maintained an office in the building, was notified of the flooding and took steps to remove the water.5 Before signing the second lease, Donigian promised to remedy the problem by resurfacing the driveway, and the work was performed.6
Donigian died on March 30, 1961.7 Thereafter, when flooding occurred, the lessor ignored Cooper's complaints, and she and her employees removed the water themselves.8 On multiple occasions, including after heavy rainstorms that left up to two inches of water, sales meetings with as many as fifty attendees had to be relocated or adjourned, sometimes requiring rental of other quarters.9 On December 20, 1961, five inches of water flooded the premises during a meeting of sales representatives from four states, forcing the meeting to be moved to a nearby inn.10
Cooper consulted an attorney that evening and, after notifying the lessor, vacated the premises on December 30, 1961.11 Reste Realty Corp. acquired the building and the lease assignment on January 19, 1962.12 On November 9, 1964, it sued Cooper to recover rent for the unexpired term through March 31, 1964.13 The trial court entered judgment for Cooper on her constructive eviction defense.14 The Appellate Division reversed, and the Supreme Court of New Jersey granted certification.15
Whether the recurrent flooding of the leased premises due to the defective driveway constituted a constructive eviction of the tenant?16
A covenant of quiet enjoyment is implied or express in a lease.17 Any act or omission of the landlord or of anyone acting under authority from the landlord which renders the premises substantially unsuitable for the purpose for which they are leased or which seriously interferes with the beneficial enjoyment of the premises constitutes a constructive eviction of the tenant.18
Yes. The recurrent flooding substantially interfered with the tenant's beneficial enjoyment and use of the leased premises for commercial offices and sales training meetings.19 The trial court found the testimony undisputed that after every rainstorm water flowed into the leased premises and nothing was done to remedy the condition despite repeated complaints.20 On multiple occasions after heavy rainstorms that left up to two inches of water, sales meetings with as many as fifty attendees had to be relocated or adjourned, sometimes requiring rental of other quarters.
The crowning incident occurred on December 20, 1961, when five inches of water flooded the premises during a meeting of sales representatives from four states, forcing the meeting to a nearby inn.21 The defective condition of the driveway, exterior wall, and foundation was permanent in the sense that it would continue and worsen if not remedied, and the landlord had no right to demand that the tenant remedy it herself.22 The court rejected any requirement that the interference be literally everlasting, holding instead that recurrence upon rainstorms with sufficient seriousness meets the test for constructive eviction.23 This conclusion aligns with the established facts showing the lessor's persistent failure to address the known defect after the building manager's death.24
The recurrent flooding constituted a constructive eviction that justified the tenant's departure and relieved her of further rent liability.25
Whether the tenant waived any claim of constructive eviction by remaining in the premises for an unreasonable period of time after the flooding condition arose?26
No. The tenant did not waive the claim because she vacated within a reasonable time under the circumstances.30 After the building manager died on March 30, 1961, the tenant continued to complain, patiently waited, hoped for relief, and personally removed water after each rainstorm for approximately nine months.31 The tolerance ended only after the December 20, 1961 flooding incident that placed five inches of water in the offices during an important multi-state meeting.32 The tenant consulted an attorney that evening, notified the lessor of her intention, and vacated on December 30, 1961, just ten days later.33
The trial court found as a fact that this vacation occurred within a reasonable time, and the evidence adequately supports that finding without establishing waiver.34 Courts must account for the drastic nature of vacation and the risk a tenant faces if the condition is later held not to constitute constructive eviction.35
The tenant did not waive the constructive eviction claim by unreasonable delay.36
Whether the tenant's execution of the second lease after experiencing the water problem and receiving a promise to repair precluded reliance on any implied warranty or covenant regarding the condition of the premises?37
Although a tenant's knowing acceptance of a defective leasehold would normally preclude reliance upon implied warranties, such acceptance does not bar the claim when the landlord's agent has promised to remedy the condition and the tenant relies on that promise in executing the new lease.38
No. Execution of the second lease did not preclude reliance because the tenant accepted it in reliance on the owner's agent's express promise to remedy the water problem.39 Prior to the April 1959 lease, the tenant had complained to the agent about recurrent flooding, the agent conceded the problem and promised to resurface the driveway, and the work was performed.40 The tenant was entitled to rely on that promise, so it cannot be said as a matter of law that she accepted the premises in their defective condition.41 The driveway, exterior wall, and foundation were not part of the demised premises, and the flooding condition was a latent defect whose existence and significance were not reasonably apparent to the ordinary prospective tenant.42
Present-day demands of fair treatment impose an implied warranty against such latent defects remediable by the landlord.43 The second lease therefore did not eliminate the tenant's ability to rely on the covenant of quiet enjoyment or the implied warranty.44
The tenant's execution of the second lease did not preclude reliance on the implied warranty or covenant.45