The Second Opinion: “Stinky” but not “Fundamental” — The BCCA sets a High Hurdle for Repudiation of a Lease

The following post on the Canadian Appeals Monitor  blog written by Anthony Alexander may be of interest to readers of this blog:

The Second Opinion: “Stinky” but not “Fundamental” — The BCCA sets a High Hurdle for Repudiation of a Lease

The contractual doctrine of “fundamental breach” is both doctrinally complex and highly contextual.  In Stearman v. Powers, 2013 BCCA 206, the Court concluded that, on the facts before it, a commercial tenant had not been justified in repudiating her lease and walking away from the premises, despite the fact that the building’s HVAC system filled her store with a foul odour.

While the case ultimately turned on its unique facts, the Court in Stearman provides useful guidance regarding the threshold for categorizing a problem with rented premises as a “fundamental breach” of contract, as well as the scope of a tenant’s right of “quiet enjoyment.”

The tenant leased a storefront to carry on a retail clothing business.  With the first arrival of warm weather, she turned on the building’s HVAC system and the store quickly filled with an unpleasant “creosote-like odour.”  The tenant complained to the landlord.  She also brought in a technician who was able to reduce the problem, but only temporarily.  Claiming that the odour made it impossible for her to carry on her business, the tenant ceased paying rent, returned her keys, and abandoned the premises.  Read More.

 

 

 

contracts equipment fundamental landlord and tenant leasing quiet Real Property repudiation

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