Also known as: fair rental values · FRV
Written by attorneys · grounded in primary & secondary sources — see below
An objective market measure of the rental value of leased premises in a given condition. The measure compares the fair rental value after a landlord default to the value before the default to calculate any proportional abatement of rent owed by the tenant.
Faye Fuller leased an eight-room medical suite from Frostline Textiles for ten thousand dollars per month. After a plumbing failure left four rooms unusable, the fair rental value of the suite dropped by half. Fuller remained in possession of the usable rooms and tendered five thousand dollars monthly. The landlord sued for the full contract rent.
The United States took temporary possession of warehouse space leased by General Motors Corporation. Experts testified that the fair rental value of the space during the taking period was forty-three cents per square foot. The court used that figure to fix the compensation owed to the company for the period of government occupancy.
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Fernando Farrell rented a residential unit from St. Peter that lacked heat and hot water. The court found the premises uninhabitable and measured damages by the difference between the fair rental value of the unit as warranted and its value in the defective condition. Farrell recovered the resulting reduction for the months he remained in possession.
The rent is reduced to the proportion that the fair rental value after the landlord default bears to the fair rental value before the default. The tenant pays that reduced amount until the default is cured or the lease ends.
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No. Fair rental value is an objective market measure of what the premises are worth in their actual condition. The contract rent may be higher or lower than that market figure and serves only as one piece of evidence of value.
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Yes. When the tenant stays in possession but the premises have diminished value, the tenant may obtain a proportional abatement measured by the drop in fair rental value rather than having to vacate.
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No. The same objective market measure applies to commercial leases when a landlord default reduces the usable value of the premises and the tenant remains in possession.
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…as it exists in its defective condition. Birkenhead v. Coombs, supra , 143 Vt. at 172, 465 A.2d at 246. In determining the fair rental value of the dwelling as warranted, the court may look to the agreed upon rent as evidence on this issue. Id. “[I]n residential lease disputes involving a breach of the implied warranty of…