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Monday, February 9, 2009

LANDLORD HELD LIABLE FOR ROOF LEAK DAMAGES

Virginia Supreme Court Update

In a case coming out of Fairfax County, the Virginia Supreme Court decided on January 16, 2009 that a landlord was liable for a tenant’s losses arising from a roof leak even though the landlord had no notice of the defect. The Virginia Supreme Court, in the case of Landmark HHH, LLC v. Park, held that the lease’s requirement that the landlord keep the roof in good repair imposed an affirmative duty on the landlord to maintain a “serviceable, leak-free roof”.

The landlord in the case, Landmark HHH, LLC, owned retail space located in the Plaza at Landmark. The tenant intended to operate a clothing store in the leased space, specializing in high-end imported men’s suits and related accessories. After various complaints about the roof leaking from the tenant and other occupants of the building, the landlord undertook to replace the entire roof of the shopping center and hired a consulting company to design and monitor the installation of the new roof. The new roof continued to leak and the landlord notified the installation company and the consulting company, which took corrective action, but intermittent leaks continued. One morning, after record rainfall, the tenant arrived at their premises and noticed an “unbearable stench” and damage to inventory that eventually required the tenant to shut down.

The trial court held that despite the fact that the landlord did not have sufficient notice that the newly installed roof would fail, the failure of the roof constituted a breach of the landlord’s obligations under the lease. The Virginia Supreme Court affirmed this position and went even further, holding that because the roof was under the exclusive control of the landlord, the landlord had the sole responsibility to ensure that the new roof would function despite the notice requirement in the lease.

The Supreme Court did, however, leave one bright spot for landlords, stating that the landlord could have exempted itself from liability by disclaiming liability for losses sustained by tenants as the result of “the common hazards to which the property would be subject.”

Advice to Landlords: Include language in your leases which disclaims liability for “common hazards.” Do not rely exclusively upon the notice provisions in your lease. Maintain roofs and other common areas where damage may occur.

Advice to Tenants: Include language in your lease specifically obligating your landlord to fix the roof and other common areas. Provide your landlord with prompt notice of any problems that you discover.

As an experienced landlord/tenant law firm, the law firm of Gross & Romanick, P.C. can assist both landlords and tenants in a wide variety of legal issues, including drafting your lease, litigation and general business issues.