Appellants rented apartments in a three-building complex called Clifton Terrace.
They all defaulted on rent for the month of April.
Tenants said they did not pay because of numerous violations of the Housing Regulations.
Procedural History
Lower court held for First National Realty, housing code violations do not affect tenant's obligation to pay rent.
D.C. Cir. reversed, held that a breach of housing code is a breach of warranty of habitability and thus gives rise to the remedies for breach of contract.
Issues
Do housing code violations which arise during the term of a lease have any effect upon the tenant's obligation to pay rent?
Holding/Rule
A warranty of habitability, measured by the housing code standards, is implied by operation of law into leases of urban dwelling units and breach of this warranty gives rise to the usual remedies for breach of contract.
Reasoning
The assumptions of landlord-tenant law need to be reexamined. They might have been reasonable in a rural, agrarian society but aren't reasonable for residential city dwellers.
Courts' view of leases should shift away from old property law and toward modern contract principles.
There has been a general shift toward this view.
Modern contract law recognizes that the buyer of goods and services must rely on the skill and honesty of the supplier to assure that the goods purchased are of adequate quality.
Courts seek to protect the legitimate expectations of the buyer.
Modern property law is also trending this way in the sale of real estate.
However, has not been extending to leases.
There is no good reason for this.
Urban tenants move around a lot and are not interested in the land, but in a dwelling suitable for occupation. It is difficult to make repairs on complex dwellings, and short-term occupants have no incentives to make these repairs.
District housing code requires that a warranty of habitability be implied in the lease of all housing that it covers.
Two other decisions have held that the Housing Regulations create legal rights and duties enforceable in tort by private parties.
One held that a lease was void as an illegal contract when the landlord knew about unsafe and unsanitary conditions in the apartment.
Here, the tenant's obligation to pay rent is dependant upon the landlord's performance of his obligations including his warranty to maintain the premises in habitable condition.
Tenants must be given an opportunity to prove the housing violations alleged.
At trial, finder of fact must find:
Whether the alleged violations existed during the period for which past due rent is claimed, and
What portion, if any or all, of the tenant's obligation to pay rent was suspended by the landlord's breach.
