§ 10.03 Self-Help Remedies

• Jurisdiction: United States
• Publication year: 2022

§ 10.03 Self-Help Remedies

Under its lease, a tenant can have the benefit of all the obligations of the landlord for properly maintaining the building, the premises, operating in a first class manner, providing services, heat ventilating, air conditioning, utilities, access, elevator service and other amenities, but what happens when the landlord does not perform? Suing a landlord is not an attractive solution in the event that the lease contains independent covenants requiring the tenant to continue to pay rent while a landlord, whether by malice, financial hardship, inattention or foreclosure, is unable or unwilling to perform its obligations under the lease. The tenant faces a particular hardship when essential services necessary to conduct its business within the premises are no longer being provided due to broken machinery or nonpayment of electric bills.¹ The hardship is compounded when the tenant has no alternative premises, finds itself unable to use its premises and may or may not have the right to offset rent.²

The right to exercise a self-help remedy is a viable solution to many of these dilemmas, but must be expressly stated in the lease. Self-help allows the tenant to take the necessary action to receive the essential services so operations can continue while the issues of rent credits or litigation are sorted out. A self-help provision can also be structured to allow the tenant, after giving notice to the landlord of its intention to do so, to complete any repairs that the landlord fails to complete within the time frame set. The provision would state that the tenant is entitled to reimbursement in the form of repayment or as a rent credit. The tenant can obtain its services from another source or may elect to perform the obligations of the landlord itself. In either case, the self-help clause should be structured to enable the tenant to receive payment back from the landlord or offset its costs against rent.³

When a lease contains a self-help provision, there is generally a period of time that must elapse after a notice is given to the landlord, the ground lessor and the mortgagee before the tenant can effectuate its self-help remedy. Such notice and delay allows the ground lessor or mortgagee to step in, take curative action and control the building, if necessary.⁴

Assuming that appropriate time periods for notice and proper criteria for remediation by the tenant is specified and agreed to, self-help can be immensely helpful. On the other hand, if serious problems are allowed to continue, a breach of quite enjoyment or failure of essential purpose might result, perhaps allowing the tenant the right to terminate its lease.

Self-help provisions must be quite specific, but also very...