Arguing Against Extending to Massachusetts Commercial Landlords the Same Duty of Care That Is Owed to Residential Tenants
The issue before the Massachusetts Supreme Judicial Court (“SJC”) in this appeal was whether the same affirmative duty that requires a residential landlord, under Young v. Garwacki, 380 Mass. 162 (1980), to maintain the leased premises in a reasonably safe condition should also apply in certain circumstances to commercial landlords. The injured party in this case was the sole employee of a small t-shirt printing company that had rented an entire building from the defendant landlord. It is alleged that the employee fell and was injured while descending a defective stairway. The employee received workers’ compensation for his injuries and then sued the landlord in Massachusetts Superior Court for negligently failing to repair the faulty staircase. Under the common law rule in Massachusetts, a commercial landlord (unlike a residential landlord) is not liable for injuries that occur on the leased premises unless the lease states otherwise. The tenant is solely responsible for the area that it has leased, while the landlord’s responsibility only extends to common areas. In this case, because the tenant had rented the entire building, the landlord would not be liable under the common law for the injuries that the employee allegedly suffered as a result of a defective staircase.
Based on the common law rule, the Superior Court granted summary judgment for the defendant landlord. The plaintiff appealed and the SJC granted direct appellate review. Subsequently, the SJC requested amicus curiae briefs to address the question “whether a commercial landlord may be held liable for personal injuries suffered by the sole employee of a small commercial tenant, caused by an unsafe condition in the rented premises existing before the lease was entered into.” The form of this question reflected the plaintiff’s central argument, which was that the small business tenant in this case resembles a residential tenant sufficiently to warrant extending the affirmative duties of a residential landlord under Young v. Garwacki to a commercial landlord.
NELF filed an amicus brief on its own behalf and on behalf of the National Association of Industrial and Office Properties (“NAIOP”), supporting the defendant landlord’s argument against a departure in this case from the common law rule in the commercial lease context. In its brief, NELF pointed out the fundamental difference between commercial and residential leases, emphasizing the importance of preserving the parties’ freedom to contract and allocate risks in the business context. NELF argued that the reasons which led to greater protection for residential tenants (a trend which paralleled the growth of consumer protection law), such as concerns about unequal bargaining power and vulnerability, do not apply in the business context, even where a small business is involved. Unlike a residential lease, a commercial lease is basically a business contract, typically negotiated at arm’s length between parties of relatively equal bargaining power who are often represented by counsel, as was the business tenant in this case. NELF also argued that, unlike residential tenants, businesses have a strong incentive to maintain a safe and productive workplace, to avoid disruption of the flow of business, and to minimize workers’ compensation liability. For these reasons, NELF argued that this case does not justify a departure by the SJC from the common law rule upon which every existing commercial lease in the Commonwealth is based.
The SJC agreed with NELF’s position, adopting many of NELF’s arguments that distinguish residential from business tenants, regardless of the size of the business, and declined to extend Young v. Garwacki to commercial leases. As the Court, agreeing with NELF, observed: “[T]he bargaining power of commercial tenants at the lease drafting stage is ordinarily greater than that of residential tenants . . . [and] [e]ven a small commercial tenant . . . would have an incentive to make repairs, for example, to avoid workers’ compensation claims and to maintain an orderly and productive business without injuries to employees or customers.”
The issue before the Massachusetts Supreme Judicial Court (“SJC”) in this appeal was whether the same affirmative duty that requires a residential landlord, under Young v. Garwacki, 380 Mass. 162 (1980), to maintain the leased premises in a reasonably safe condition should also apply in certain circumstances to commercial landlords. The injured party in this case was the sole employee of a small t-shirt printing company that had rented an entire building from the defendant landlord. It is alleged that the employee fell and was injured while descending a defective stairway. The employee received workers’ compensation for his injuries and then sued the landlord in Massachusetts Superior Court for negligently failing to repair the faulty staircase. Under the common law rule in Massachusetts, a commercial landlord (unlike a residential landlord) is not liable for injuries that occur on the leased premises unless the lease states otherwise. The tenant is solely responsible for the area that it has leased, while the landlord’s responsibility only extends to common areas. In this case, because the tenant had rented the entire building, the landlord would not be liable under the common law for the injuries that the employee allegedly suffered as a result of a defective staircase.
Based on the common law rule, the Superior Court granted summary judgment for the defendant landlord. The plaintiff appealed and the SJC granted direct appellate review. Subsequently, the SJC requested amicus curiae briefs to address the question “whether a commercial landlord may be held liable for personal injuries suffered by the sole employee of a small commercial tenant, caused by an unsafe condition in the rented premises existing before the lease was entered into.” The form of this question reflected the plaintiff’s central argument, which was that the small business tenant in this case resembles a residential tenant sufficiently to warrant extending the affirmative duties of a residential landlord under Young v. Garwacki to a commercial landlord.
NELF filed an amicus brief on its own behalf and on behalf of the National Association of Industrial and Office Properties (“NAIOP”), supporting the defendant landlord’s argument against a departure in this case from the common law rule in the commercial lease context. In its brief, NELF pointed out the fundamental difference between commercial and residential leases, emphasizing the importance of preserving the parties’ freedom to contract and allocate risks in the business context. NELF argued that the reasons which led to greater protection for residential tenants (a trend which paralleled the growth of consumer protection law), such as concerns about unequal bargaining power and vulnerability, do not apply in the business context, even where a small business is involved. Unlike a residential lease, a commercial lease is basically a business contract, typically negotiated at arm’s length between parties of relatively equal bargaining power who are often represented by counsel, as was the business tenant in this case. NELF also argued that, unlike residential tenants, businesses have a strong incentive to maintain a safe and productive workplace, to avoid disruption of the flow of business, and to minimize workers’ compensation liability. For these reasons, NELF argued that this case does not justify a departure by the SJC from the common law rule upon which every existing commercial lease in the Commonwealth is based.
The SJC agreed with NELF’s position, adopting many of NELF’s arguments that distinguish residential from business tenants, regardless of the size of the business, and declined to extend Young v. Garwacki to commercial leases. As the Court, agreeing with NELF, observed: “[T]he bargaining power of commercial tenants at the lease drafting stage is ordinarily greater than that of residential tenants . . . [and] [e]ven a small commercial tenant . . . would have an incentive to make repairs, for example, to avoid workers’ compensation claims and to maintain an orderly and productive business without injuries to employees or customers.”
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