Covenant of Quiet Enjoyment

Last Updated on Sunday, 27 August 2023 03:16 Written by Chris Griswold Monday, 25 May 2015 06:24

The “Covenant of Quiet Enjoyment,” we’ve all seen it, but have you ever had to really use it?  I’ve seen more than a few people confused by the legal significance of this phrase and thought everyone would benefit from a quick talk on this subject.  Take a look below… (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Covenant of Quiet Enjoyment

Some anonymous person once humorously noted “…I have my mind made up so don’t try to confuse me with the facts.”  We’ve all seen the covenant of quiet enjoyment expressed in the leases we negotiate.  It ordinarily reads something to the effect of “… Tenant may peaceably and quietly have, hold and enjoy the premises for the term aforesaid….”  However, what is this covenant, why is it there & what implications follow from the parties expressly addressing it in their lease?

What is it?  The covenant of quiet enjoyment is the legal mechanism which prevents a landlord (or anyone for whose conduct the landlord is responsible) from “interfering” with a tenant’s use and enjoyment of the leased premises during the lease term.  Interestingly enough, if this covenant is not expressly spelled out in the lease (or if the lease was made orally), the law actually implies (i.e., inserts) this covenant into the lease.  When the law implies this covenant into the lease, the upshot is that upon such “interference” by landlord, the tenant doesn’t have to pay rent and can even elect to terminate the lease.

If the law implies it into every lease, why do I always find it written into every lease?  Even though the law implies this covenant into every lease, the parties to a lease can still modify and condition the enforcement of this covenant by tenant.  Accordingly, when the language relating to the covenant of quiet enjoyment appears in the lease, it’s actually restricting and conditioning tenant’s rights – not enlarging them….  That’s why your lease reads that “…upon tenant’s payment of rent and observance of all the terms and provisions of this lease as contained herein, tenant may peaceably and quietly have, hold and enjoy the premises for the lease term contained herein….”  Remember, in the beginning, landlords’ counsel drafted the leases to serve the best interests of landlords, not tenants.  Since that time, due to all the leases that have been executed over the years, it has become a custom that Tenant will have to pay rent and perform all of their lease obligations prior to enforcing the covenant of quiet enjoyment against Landlord (which is reverse of how the law would otherwise imply).

What implications follow from the parties expressly addressing it in their lease?  Basically, once the covenant of quiet enjoyment is expressed (i.e., conditioned) in the lease, it’s incumbent upon the tenant (and even the landlord) to carefully draft the lease provisions so that their interests are protected.  Why?  Upon seeing that the parties have chosen to negotiate their own particular terms as relating to the covenant of quiet enjoyment, the courts will not, absent certain circumstances, modify such negotiated terms.  So, negotiate carefully and write well….

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Leases v. Licenses v. Easements

Last Updated on Sunday, 27 August 2023 03:16 Written by Chris Griswold Tuesday, 14 April 2015 02:58

Knowing the basics pays dividends.  At some point, it will make a big difference in the outcome of one of your deals.  Accordingly, we’re going to review some of the basic differences between leases, licenses and easements.  Why?  Each vehicle has its own different strengths/weaknesses and I’ve seen each used within the wrong context.  Take a look below… (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Leases v. Licenses v. Easements

Absent certain language within the document and/or certain special circumstances, the foregoing table quickly summarizes the basic, legal discrepancies between each type of vehicle.  What practical effect do these differences have on you?

Parking Situations:  I’ve seen property owners grant easements to other adjoining property owners for parking space.  While this may sometimes be in the best interests of the granting property owner, it’s usually not.  Why?  Easements are not usually revocable and are usually perpetual (which makes the issue of whether they’re assignable moot).  This all makes granting a parking easement a little risky since you might not like the future owners of the adjoining property.  Instead, you’d probably want to use either a lease or a license – depending upon the situation.

Vacating Right of Ways:  I’ve seen back-to-back property owners discuss the possibility of jointly vacating an alley (which would result in each property owner getting back their half of the alley) just to overlook the possibility that, unless they enter into a “reciprocal easement agreement” at the time of vacation, the other property owner could ostensibly fence off their half of the alley thereby constructively blocking off the other’s access to the back of their building (depending on the width of the alley).  In other words, granting each other mutual leases or licenses upon the other’s land won’t long-term protect either them or their respective successors (since neither a lease nor a license is perpetual in duration).

Snowcone Stands, Parking Lot Nurseries, Christmas Tree and Pumpkin Lots:  The big things here are: 1) seasonal/temporary use, and 2) your familiarity with the operators.  It’s okay for a property owner to grant a lease to an operator they’ve done business with for years for a 6 month term (i.e., Spring through Summer) to sell plants or to serve snow cones.  However, it’s likely unwise to grant a lease to a new and unknown operator who wants to sell pumpkins for just a few weeks.  Why?  As a property owner, you won’t mind granting the lease with a hard, irrevocable, 6 month term to the repeat operator, but, with the new operator who only needs the space for a month or so, you’d probably want to use a license in order to retain the right to quickly revoke an unworkable/undesirable situation – especially since the term is so short….

What My Clients Are Saying

“Chris is a competent, hardworking attorney.  Chris is always there when you need him and you don’t have to wait a day to get a returned phone call.  He does what he says he is going to do in a timely manner.  He has the expertise to make problems simpler which makes them easier to solve.  He is honest, consistent and reliable.  He loves what he does and is active in the community.” David Ostrowe / Owner, O & M Restaurant Group, Inc. / Oklahoma City, Oklahoma

Joint & Several Liability

Last Updated on Sunday, 27 August 2023 03:16 Written by Chris Griswold Monday, 23 March 2015 02:12

“Joint and several liability,” what does that mean?  You’ve seen this phrase hundreds of times and you’ve probably even signed documents and agreements before with these words in the text.  I’ve seen more than a few people confused by the legal significance of this phrase and thought everyone would benefit from a quick talk on this subject.  Take a look below… (and don’t forget to click on my Facebook or YouTube links below to also see my short video on this material).

Joint & Several Liability

Scenario:  You and a buddy decide to start a new business.  You find some good office space and, although you’ve recently formed a new corporate entity to act as the actual tenant under the lease, the landlord still wants you both to sign personal guaranties.  A year later, you and your buddy have a falling out and your buddy then locks you out of the space but continues to operate from the space for about another 6 months thereafter.  Unbeknownst to you, your buddy isn’t keeping up with the rent payments after he “went solo.”  Accordingly, landlord later brings suit for the unpaid rent which has accrued under the lease (that your buddy wasn’t paying) and you get served one day for the breach of contract suit instituted against both you and your buddy by landlord.  You look at your lease and you notice you both signed it as guarantors who “… shall be jointly and severally liable under the lease.”  How could this scenario play out?  Three different ways.

Possible Outcome #1:  Landlord could successfully, at their sole option, pursue just your buddy (not you) for the back due rent under the rationale that your buddy (not you) was actually operating from the premises and had locked you out.  You’re happy of course.

Possible Outcome #2:  Landlord could successfully pursue you both under the rationale that, as guarantors who were both “…jointly and severally liable under the lease,” you both are equally liable under the lease for the back due rent.  Not so great for you since you’re not even able to get into the space anymore after your “buddy” locked you out months ago.

Possible Outcome #3:  Landlord could successfully, after your buddy got killed by a drunk driver last month (ironically right after he got served with landlord’s breach of contract suit), decide to pursue just you alone for the back due rent (since your buddy is now deceased and died virtually bankrupt).  Wow, you weren’t expecting that….

What My Clients Are Saying

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Kelly Miller / President / Professional Insurors Agency, LLC / Oklahoma City, Oklahoma

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