Navigating the Implied Covenant of Quiet Enjoyment
Landlord Larry thought he’d seen it all. Leaky roofs, unpaid rent, a tenant who tried to turn a conference room into a sauna. But nothing prepared him for the voicemail he received from the tenant in Suite 204:
“Larry, it’s happening again. The bagpipes. I can’t hear myself think, let alone close a deal. Please make it stop.”
From the day the tenant in Suite 203 moved in, it had been bagpipes morning, noon and night, the penetrating noise originally designed to strike fear into the hearts of Scotland’s enemies now disturbing every tenant in Landlord Larry’s small office building. For weeks, Larry’s tenants had been complaining. One particularly irritated tenant, a yoga studio, has even threatened to stop paying rent, claiming that the noise is destroying the serene conditions they need to operate their business.
Larry wondered:
Is this just a quirky tenant, or do I have a legal obligation to stop the bagpipes from blowing?
Under Arizona law, “It is generally well recognized that there is an implied covenant in a lease for the quiet enjoyment of the premises by the lessee free from any interference on the part of the landlord.” Johansen v. Arizona Hotel, 37 Ariz. 166, 173 (1930). This obligation applies to Landlord Larry even if not expressly included in the lease. If the interference is so substantial as to effectively deprive tenants of their beneficial use of the leased premises, the interference may even constitute a “constructive eviction,” allowing the tenant to move out of the premises and seek damages against Landlord. Id.; Restatement (Second) of Property § 4.3. Critically, however, the implied covenant only applies to acts by Landlord Larry, and “does not extend to the acts of other tenants or third parties unless such acts are performed on behalf of the landlord or by one claiming paramount title.” Thompson v. Harris, 9 Ariz. App. 341, 345 (1969).
Applied to the offensive sound of the pompous windbags in Suite 203, it would seem that perhaps Landlord Larry is off the hook, because he is not himself playing the pipes. However, the analysis should not stop there. Arizona courts have also held that although landlords generally are not liable for nuisances created by tenants, the landlord may become liable if it has notice and the power to correct the nuisance—such as through lease enforcement or termination they may become liable if they have the power to stop the nuisance and fail to do so. Klimkowski v. De La Torre, 175 Ariz. 340, 342 (Ct. App. 1993). Arizona adopted the Restatement (Second) of Torts § 837(1), which states:
“A lessor of land is subject to liability for a nuisance caused by an activity carried on upon the land while the lease continues and the lessor continues as owner, if the lessor would be liable if he had carried on the activity himself, and
(a) At the time of the lease the lessor consents to the activity or knows or has reason to know that it will be carried on, and
(b) He then knows or should know that it will necessarily involve or is already causing the nuisance.”
With this rule in mind, Landlord Larry should ask himself whether he knew the tenant in Suite 203 would be bagpiping at all hours when he signed the lease. Given that the tenant’s business was named “The Arizona College of Scottish Bagpipes,” Landlord Larry might be in trouble, because by leasing to a tenant he knows or should know would shatter the serene stillness sought by his yoga tenant in Suite 204, he arguably committed an act that breached the covenant of quiet enjoyment.
Similarly, if the noxious noise breaches an express provision and Landlord Larry fails to enforce his right to terminate the lease, then Larry’s failure may likewise violate the implied covenant owed to Suite 204.
What can we learn from poor Landlord Larry? As always, an ounce of prevention is worth a pound of cure, and in the context of commercial leasing that often means making sure your lease is up to snuff, including express language appropriately limiting tenant’s uses of the premises. Well drafted provisions restricting noise, odors, or any other use that might disturb other tenants, will give you the contractual right to take appropriate action in the event an unwanted bagpiper darkens your door. Consider also including an express quiet enjoyment provision that defines and limits the contours of the quiet enjoyment covenant, including by stating that disturbances of a certain type, duration, or severity, do not violate the covenant, as well as provisions limiting the landlord’s liability for the conduct of other tenants. Relatedly, by understanding your tenant’s contemplated use of the premises before executing the lease, you can avoid the mistake of placing a bagpipe college next to a yoga studio, and you can tailor the lease as needed to accommodate any industry-specific concerns.
Commercial landlords like Larry aren’t expected to police every tenant quirk. But when one tenant’s behavior interferes with another’s ability to use their space, it’s time to carefully evaluate the situation. So if you’re a landlord wondering whether lunchtime bagpipes—or any other oddball disruption—could land you in legal hot water, call your friendly neighborhood lawyer.
Michael P. Rolland is a passionate and committed advocate that represents individual and business clients in commercial litigation, Chapter 11 bankruptcies, receiverships, loan workouts, and appeals.