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Quiet Enjoyment

Quiet enjoyment is a right to the undisturbed use and enjoyment of real property by a tenant or landowner. The right to quiet enjoyment is contained in covenants concerning real estate. In the absence of a provision in a lease agreement that explicitly provides for a warranty of quiet enjoyment, courts will typically read such a provision into a contract.
ContractStandards Analysis
 Article  Type
   Covenants; Additional Agreements   Standard

  
Standard Clause
Provided Tenant has performed all of the terms and conditions of this Lease, Tenant will, subject to the terms of this Lease, at all times during the Term, have peaceful and quiet enjoyment of the Premises against any person claiming by, through or under Landlord.

Clause Elements
In a lease agreement, a quiet enjoyment provision assures the tenant that the tenant’s physical possession and use of the premises subject to the lease will not be disturbed by adverse claimants. The quiet enjoyment provision can be separated into four key elements:
  1. The provision is typically made conditional upon the tenant satisfying the tenant’s obligations under the lease agreement. The tenant’s obligations can be stated generally or specifically.
  2. The provision is subject to a temporal limitation, usually the length of the lease agreement.
  3. The operative clause of the provision explicitly states that, so long as the tenant is not in breach of the lease agreement, the tenant is guaranteed the right to “peaceably and quietly hold” possession of the premises subject to the lease. As discussed below, what constitutes a violation of “peaceable and quiet” possession is fact-specific.
  4. Finally, the provision identifies who is prevented from interfering with the tenant’s right to enjoy possession of the premises. There are typically two parties identified in such a provision: (a) the landlord, and (b) any third party asserting rights in the property, where the third party gained the rights asserted from the landlord. Accordingly, the quiet enjoyment provision would not provide assurance against adverse claims from parties asserting legal rights to the property where the rights asserted are derived wholly from a source independent of the landlord’s interest in the property.
Notes
1. Commercial Leases – The quiet enjoyment provision of a lease agreement may be altered to fit the needs of two business entities entering into a commercial lease. Two examples in particular include:

(a) Compliance With Applicable Zoning Regulations – A quiet enjoyment provision in a commercial lease may be altered to provide assurance to the tenant that the property and the uses contemplated under the rental agreement conform with any and all applicable zoning regulations, and allow the landlord to enforce such rules:
Example: If Tenant pays the rent and complies with all other terms of this Lease, Tenant may occupy and enjoy the Premises for the full Lease Term, subject to the provisions of this Lease. The Landlord represents to Tenant that the Permitted Uses are in general conformance with zoning applicable to the Premises on the execution date of this Lease. Landlord shall take commercially reasonable steps to enforce the Project rules and regulations on a nondiscriminatory basis.

(b) Shared Premises – The contours of quiet enjoyment provision in a commercial lease may also be altered to accommodate the reality that a particular rental space is shared by multiple tenants (e.g., an office building): 
Example: No action of Landlord or other tenants working in other space in the Building, or in repairing or restoring the Premises, shall be deemed a breach of this covenant [of quiet enjoyment] if reasonable access to the Premises is provided to Tenant.

2. Eminent Domain – A quiet enjoyment provision may also explicitly absolve the landlord of liability should a governmental entity take the rented property under an eminent domain action:
Example: Landlord covenants and warrants that so long as Tenant keeps and performs all of the agreements, covenants and conditions by the Tenant to be kept and performed, Tenant shall have quiet, undisturbed and continued possession of the Premises, free from any claims of Landlord and all persons claiming by, through or under Landlord, except with respect of such portion of the Premises as may be taken under the power of eminent domain.

3. Warranty of Good Title & Indemnification – A quiet enjoyment provision may also be tied together with the landlord’s warranty of good title—the assurance that the property is not encumbered by any liens or claims of title to the property—as well as the landlord’s duty to defend and indemnify the tenant for any adverse claims asserted against the rented property.
Example: Landlord warrants to Tenant that Landlord has good title to the Premises free and clear of all liens and encumbrances, except as set forth in Section 22 of this Lease, and that Landlord may rightfully enter into this Lease. Landlord shall protect, defend and indemnify Tenant against any interference with Tenant's use and quiet enjoyment of the Premises.

Discussion & Further Reading

The time to deal with the covenant of quiet enjoyment is when the lease is written. Failure to do so will invariably cause one party or the other to risk an unpleasant surprise. With the hazy boundaries that courts have drawn, the covenant of quiet enjoyment is relatively broad. Unlike lease covenants more precise in nature, such as those requiring a landlord to keep the roof in good condition and free of leaks or requiring a tenant to carry a specific minimum level of insurance, the covenant of quiet enjoyment speaks of “interference with enjoyment.” This concept is almost one of equity, allowing courts to work without strict guidelines in ascertaining whether or not to grant relief to an aggrieved tenant. A well thought out lease will limit the uncertainties of this state of affairs. (Ira Melsik, What Is this Thing Called Quiet Enjoyment? (In the Context of Commercial Leases), Aug. 5, 1997, available at http://www.meislik.com/articles/quiet_enjoyment_commercial_leases/).

Substantial Interference -- “There is no clear-cut test to determine whether a landlord has interfered with the tenant’s quiet enjoyment. This issue has gone before the Courts numerous times, but the case law in this area is inconsistent. The following are situations where the Courts have found that the landlord’s actions constituted a substantial interference with the tenant’s quiet enjoyment: a landlord erecting scaffolding in front of a tenant’s store interfering with the tenant’s business, a landlord creating a substantial amount of dirt and dust while undertaking renovations to another unit, a landlord undertaking unannounced and periodic inspections of a tenant’s premise, and consistent interruptions to gas and electricity supply. A breach of the covenant may not be found in all cases. Generally when the interruption is foreseeable or when reasonable care has not been exercised, the landlord may be deemed to have interfered with the tenant’s quiet enjoyment.

“It should be noted that the interruption must be more than just an inconvenience or annoyance and, in most cases, must have a physical element to the interference.”

(Meredith J. Serota, What is this Thing Called Quiet Enjoyment?, Law Information, Nov. 28, 2007, available at http://legalcatch.wordpress.com/2007/11/28/what-is-this-thing-called-quiet-enjoyment/)

o See also – David G. Kroll, The Landlord/Tenant Warranty of Habitability and the Covenant of Quiet Enjoyment, Colorado Lawyer 21 (June, 1992).

Example

Quiet Enjoyment. So long as Tenant shall perform all of the covenants and agreements herein required to be performed by Tenant, Tenant shall, subject to the terms of this Lease, at all times during the Term, have peaceful and quiet enjoyment of the Premises against any person claiming by, through or under Landlord.
 § Lease, Nov. 14, 2007, ARE-SEATTLE NO. 14, LLC, and ALLOZYNE INC., available at http://www.sec.gov/Archives/edgar/data/755806/000119312511241074/dex1043.htm


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