SJC Decision Affects Landlord Liability

The Massachusetts Supreme Judicial Court recently ruled in Bishop v. TES Realty Trust that a commercial landlord has a statutory duty to correct an unsafe condition, if the landlord has received written notice from the tenant.  In its decision, the Court determined that G.L. c. 186, § 19, which concerns a landlord’s duty to make repairs when notified of an unsafe condition, now applies to commercial landlords. While such an obligation has been applied to residential landlords, this would be a significant change for commercial owners.

Until now, commercial landlords have only been required to make repairs to common areas or when they specifically contract through the lease to make repairs. Under Bishop, the landlord will be liable for any injuries resulting from inaction on a written notice to make repairs. 

The Bishop decision also makes “void and unenforceable” any lease provision that attempts to waive a commercial landlord’s obligation under §19.  Even if the tenant is obligated to make repairs through the lease (e.g. triple net), the landlord must make the repairs of unsafe conditions if notified in writing by the tenant.  However, the landlord may bill the tenant for the costs of the repairs.

There is no question this decision will have far reaching consequences for the commercial real estate industry.  The decision increases liability for commercial landlords and significantly impacts how commercial leases are structured.  Serious questions remain regarding how this decision will be implemented.  NAIOP is now determining a legislative strategy to respond to the decision.

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