D. Commercial Tenant's Possession, Use, and Enjoyment

• Library: Practical Guide to Commercial Real Estate in South Carolina (SCBar) (2012 Ed.)

D. Commercial Tenant's Possession, Use, and Enjoyment

1. Possession

Under South Carolina common law, the landlord is only required to give the legal right of possession to the tenant. The South Carolina Supreme Court has not consistently adhered to the requirement of actual entry when concerned with the essential lease element of granting possession.

In all commercial tenancies, the landlord is legally considered to be in possession of the real estate that is being used or inhabited by the tenant, and the tenant is deemed to hold the premises under the landlord's possession. For example, a landlord would be considered in possession of property by virtue of the tenant's occupancy.⁶⁰ Furthermore, a tenant is not considered to possess property adversely to the landlord's title because a tenant's possession is actual possession by the landlord.⁶¹ In fact, a tenant's possession in South Carolina is the equivalent of the landlord's possession until ten years subsequent to the termination of a written lease or ten years from the moment of failure to pay rent where no written lease is in effect.⁶²

Leased real estate belongs to the landlord, but the landlord's rights in the property are limited by the terms of the lease and applicable statutory provisions.⁶³

South Carolina retains to a certain degree the common law doctrine of interesse termini. Under the interesse termini doctrine, a legal distinction is made between the contractual relationship of the lessor and lessee and that of the landlord and tenant which arises only after the tenant is in possession of the property and given a cognizable estate. A lessee only holds an interesse termini until actual entry occurs. Consequently, the landlord-tenant relationship does not commence without entry on behalf of the lessee regardless of whether the lease has been executed by both parties.⁶⁴

2. Habitability

In the commercial setting, the law tends to view the landlord and tenant as being on equal footing- equally sophisticated parties entering in to a common operation. The landlord-tenant relationship is a reflection of two business people engaged in an arm's length transaction and as such is viewed as contractual in nature. Consequently, if a commercial lease is silent concerning who is responsible for repair and maintenance, the commercial tenant cannot rely on implied obligations concerning the landlord. Instead, the tenant will generally have to carry the burden.

Absent express agreement, a commercial landlord has no obligation to maintain commercially leased property in good repair since South Carolina law does not recognize an implied warranty of fitness or habitability.⁶⁵ Under South Carolina commercial leases, there is no implied warranty of habitability and therefore no obligation on behalf of the landlord to comply with existing governmental housing standards.⁶⁶ Moreover, unless there is an express warranty present within the lease agreement or fraudulent concealment of a defect on behalf of the landlord, the landlord will not be held liable for any deficiency in the leased property. A landlord may contractually agree to maintain the premises in repair, but the tenant must notify the landlord of the defects before the obligation to repair arises. If a landlord is contractually obligated to make repairs, any failure will give rise to a cause of action for breach of contract. In short, South Carolina case law holds that absent an express agreement to the contrary, the commercial landlord is under no obligation and thus has no legal duty to make repairs or to render the leased premises tenantable. Therefore, without an express provision inserted into the contractual agreement, the landlord has no duty...