No Constructive Eviction Where Tenant Didn’t Notify Owner of Sewage Problem

What Happened: After experiencing repeated problems with the building sewage system, a bank branch tenant decided to move out. In its notification letter, the tenant claimed that it was subjected to “hazardous environmental conditions”—namely, mold and sewage backup—and claimed that the landlord’s failure to remedy the problem was constructive eviction. The landlord, in turn, sent the tenant a default notice, and it was on to litigation. The trial court sided with the landlord and ordered the tenant to pay $953,461 in damages, attorneys’ fees, costs, and pre-judgment interest.

Decision: The federal Court of Appeals for the Second Circuit upheld the ruling.   

Reasoning: Even if the sewage problems did create a hazardous condition, it was reasonable for the jury to find that the tenant didn’t comply with the notice provisions of the lease requiring it to give the landlord notice of “any environmental concerns” or “defects [in the premises] or in any fixtures or equipment.” From January 2012 to March 2016, the tenant called a plumber to fix a sewage problem six times; but not once did it notify the landlord of the problem or that a plumber had been called. The one time it did call the landlord in December 2016, the landlord responded promptly by calling a plumber and confirming with the tenant that the issue had been resolved. Having dispensed with the constructive eviction defense, the court ruled that the tenant was in default and the landlord could exercise its lease right to accelerate the rent.

• Leeber Realty LLC v. Trustco Bank: 2019 U.S. App. LEXIS 38053