Tenant Leasing Illustrated – February 2019 – Robocalling Constructive Eviction

Nobody answers the land line in my house anymore (and no, not just when caller ID indicates that it is me calling).

I know, I know, it sounds like I am lamenting having less use for my buggy whip, but the speed with which cell phones replaced land lines is striking.

At one point we all raced to answer the telephone, but now the only possibilities are CVS telling me for the umpteenth time that the prescription I never ordered is ready for pick up or a telemarketer.

Much like a 150-page commercial lease, telemarketing and telephone scams have also become a part of 21st century life as robocalls increased to over five billion in November 2018 alone (in dog years that’s 16 calls per month for each person in the U.S.).

I just never realized until reading a recent Wall Street Journal article how many people not only get mad, but (cue evil laugh) also get even.

They try to string the telemarketers or scammers along on the telephone as long as possible in minor pyrrhic yet satisfying victories by playing dumb, dragging on futile conversations, offering to pay scam charges with made up credit card numbers, or even, egads, putting their teenagers on the telephone.

I love one guy who keeps trying to get each telemarketer to sing “Jingle Bells”.

Some even use apps that bot the botters by responding with recorded answers with pauses designed to seem like real people. One involves a woman who seems interested but keeps interrupting to talk about spaghetti (I think I may have dated her once).

Once again, life imitating Seinfeld, reminiscent of Jerry asking a telemarketer if he could call the telemarketer later when the telemarketer is at home.

I have to admit that when the land line was still “a thing”, I sometimes handed the telephone to one of my then young children to hash out the details of the telemarketer’s pitch.

With the kiddies grown up, maybe I should try reading the next telemarketer or scammer some of my more scintillating lease clauses, but I suppose there are places too cruel for even me to go.

Telemarketers calling too much is a relatively minor annoyance. Landlords who do not answer a tenant’s calls for repairs or services can be a big-time problem.

Most leases will specifically provide that, notwithstanding the failure of a landlord to make repairs or provide required services, the tenant is still obligated to pay its rent and such failure will not be deemed a “constructive eviction.”

A constructive eviction is where the wrongful acts or failures to act by a landlord substantially and materially deprive the tenant of the beneficial use and enjoyment of its premises to the point where the tenant actually stops using and leaves its premises.

As we have said in the past, a well-drafted lease for a tenant with some leverage will provide the tenant with abatement rights in situations that somewhat track the elements of constructive eviction, i.e., where the landlord has not met its obligations regarding repairs or services, the space (or a portion thereof) becomes untenantable, and the tenant cannot and actually does not use all or some of its space.

A tenant with a large amount of leverage may even be able to obtain a right to “self-help” and complete a repair itself.

Yet sometimes a landlord’s actions or failures to act are so egregious that an abatement of the rent with respect to the affected space is not enough and self-help is not a practical remedy.

We recently worked with a tenant living through an ongoing construction project in its building involving, among other things, excessive and unhealthy dust, loss of restrooms on its floor and passenger elevators shared with construction personnel and their materials.

Under these conditions an abatement will only go so far, and a tenant may actually be constructively evicted since it needs to vacate for the health of its employees and/or customers and to properly conduct its business.

Tenants should negotiate in their leases the most protections possible with respect to a non-performing landlord but also be aware of their rights in terms of constructive eviction by keeping in mind the following six issues:

  • Negotiate for abatement. Include an abatement provision in your lease which will hopefully incentivize your landlord to meet its repair, construction and services obligations in the first place. After a relatively short cure period (e.g., five, seven or ten business days), if a material portion of your premises (for example, 5% or 10% or a particularly important area such as a conference center) is untenantable and cannot be (and actually is not) used for the conduct of your regular business, you should receive an abatement of fixed and additional rent with respect to the affected area for the duration of time that the space is not useable and is actually not used.
  • Attempt “self-help” rights. If your landlord does not meet its obligations under your lease, you may be able to negotiate the right to perform the work yourself and receive either a reimbursement from your landlord or a right of offset against future rent in the amount of the cost of such work. This can be particularly helpful if you need your landlord to complete the build out of your premises but less helpful in addressing structural problems or issues affecting building systems such as HVAC or elevators. This remedy is also hard to achieve unless you are a large tenant (or a triple net tenant) with a good deal of leverage. Even in such instances, the self-help right will likely first require a notice and cure period and various pre-conditions, such as the existence of the failure adversely affecting your ability to conduct business and/or the cure affecting only your premises or a mechanical area in another part of the building which exclusively services your premises.
  • Understand the elements of constructive eviction. The elements of constructive eviction include:
    • a wrongful act or failure to act by your landlord (e.g., failure to provide services, make repairs or complete construction).
    • substantial and material deprivation of the beneficial use and enjoyment of your premises (e.g., loss of air conditioning and ventilation, repeated flooding, frozen pipes leading to loss of heat, etc.).
    • your actual abandonment of the premises.
  • Continue to pay rent. New York case law requires that you not withhold rent until you have vacated the premises and this may be true in other jurisdictions.
  • Create a record. Although somewhat self-serving, it helps to create a record of the problem as it develops, including emails and letters detailing the complaint with as many specifics as possible and letters from your attorneys.
    • Pictures are a great way to record visible issues such as dust, flooding and similar damage.
    • Third party reports, such as environmental reviews of air quality, engineer reviews of faulty building systems and contractor’s estimates of damage repairs all provide helpful evidence.
    • Creating a record may also help establish a tort remedy or provide evidence if the conduct of your landlord violates applicable building codes.
  • As a last resort, pull the trigger. If your landlord’s failure to make repairs, provide services or complete construction is affecting the health of your employees, customers or guests or is materially interfering with your ability to conduct your business, you may have no choice but to abandon your premises and try to establish constructive eviction. The risk is that if you cannot establish constructive eviction, you will be liable for the balance of the rent for the remainder of the term (in NY State, there is no obligation for a landlord to mitigate damages but if your landlord does bring in a new tenant this will result in a credit against your liability). But at the point where you truly need to leave, constructive eviction may be readily apparent to all.

The first words ever spoken over a telephone were by its inventor, Alexander Graham Bell, when he uttered the somewhat mundane “Mr. Watson – Come here – I want to see you.” But if your landlord will not come and fix things when you want to see them, it will be anything but mundane and paying attention to the suggestions above may help you make the call on constructive eviction.