Almost all commercial leases in the United States include a covenant of quiet enjoyment. At its simplest level, the protection afforded by the covenant to a tenant is straightforward: a landlord must not interfere with a tenant's use and enjoyment of the leased premises. Tenants, however, have attempted to utilize the covenant in a more expansive way to make claims and obtain damages against landlords for various types of landlord behavior. The scope and nature of the landlord's detrimental behavior are important factors in determining whether the tenant will have a potentially successful claim for the breach of the covenant of quiet enjoyment. But recent cases suggest that leases can be drafted to limit the scope of the covenant and/or the landlord’s liability for breach of the covenant. Continue Reading Questions & comments
Homeowner Associations and Members Not Necessarily Bound By Arbitration Provisions in CC&Rs or in Related Purchase Agreement Where Developer is Initial Declarant
Pinnacle Museum Tower Association v. Pinnacle Market Development (US) LLC, No. D055422 (4th Dist. July 30, 2010)
By Michael Wilmar and Aaron Kleven
Homeowners and homeowner associations are not necessarily bound by arbitration provisions in a declaration of covenants, conditions and restrictions, or in a related purchase agreement, where the developer is the initial and only declarant. That is the implication of a July 30th ruling of the Fourth District of the California Court of Appeal. In Pinnacle Museum Tower Association v. Pinnacle Market Development (US) LLC, a homeowner association brought a construction defect suit on behalf of itself and its members for damage to common areas. The developer of the condominium project attempted to block the suit, claiming the plaintiff was bound to an arbitration provision recorded in the project CC&R's. It argued the provision committed the Association to resolve all construction disputes through arbitration and waived the Association’s right to a jury trial. The purchase and sale agreements signed by the individual condominium owners also contained a jury waiver and a provision compelling owners to comply with the arbitration provision in the CC&R's. But the court concluded that the provision in the CC&R’s did not constitute an agreement sufficient to wave the Association's constitutional right to a jury trial. And it found the corresponding provision in the purchase and sale agreement unconscionable and unenforceable against the individual owners.