Did Sewer Backups Give Tenant Right to Terminate for “Untenantability”?

What Happened: Blockages in sewer pipelines located outside the property caused a constant stream of sewer backups inside a tenant’s store. Eventually, the tenant decided that enough was enough and vacated the premises. When the landlord sued for unpaid rent, the tenant claimed that the sewer problems rendered the property untenantable and gave it the right to terminate the lease. The landlord denied responsibility for the sewer situation and moved for summary judgment.

Ruling: The Texas federal court denied the motion.

Reasoning: The key language in the lease was the provision purporting to relieve the landlord of liability for interruption of “utilities”:

Landlord neither assumes any liability for damages to either person or property due to the bursting of water lines or the cessation or interruption of any utility services, nor shall Landlord be considered in default hereunder as a result of such a cessation or interruption of utility services. No such interruption or malfunction of any utility services shall constitute an actual or constructive eviction . . . or, except as provided herein, render Landlord liable for any damages or entitle Tenant to be relieved from any of its obligations hereunder or entitle Tenant to an abatement of Rent or other charges[.]  

The landlord insisted that this clause covered any malfunction that would cause any utility service affecting the store to operate improperly. But the court disagreed, saying that the language was less than crystal clear and left room for interpretation. The court also cited another lease clause requiring the landlord to repair “damage to any utility lines (sewer, water, gas or electrical) located outside the boundaries of the Leased Premises,” provided that the tenant gives prior notice of the damage. Result: A trial would be necessary to determine whether the landlord’s failure to fix the sewer backups violated the lease and gave the tenant the right to terminate.

• Highland Vill. Ltd. P'ship v. Comcast Cable Commc’ns Mgmt., LLC, 2024 U.S. Dist. LEXIS 3370, 2024 WL 83509