COMMERCIAL LANDLORD-TENANT: Duty to Repair – Illinois Law

When something breaks in a commercial space, who is obligated to make the repair?

Absent a covenant in a lease obligating the landlord to make repairs, a landlord generally has no obligation to repair the leased premises, unless the landlord has actual knowledge of a defect at the time of entering into the lease and fraudulently conceals it. Baxter v. Illinois Police Federation, 63 Ill.App.3d 819, 380 N.E.2d 832, 835, 20 Ill.Dec. 623 (1st Dist. 1978); Elizondo v. Perez, 42 Ill.App.3d 313, 356 N.E.2d 112, 113, 1 Ill.Dec. 112 (1st Dist. 1976).

It is clear, however, that when a lease provides express covenants assigning responsibilities between landlord and tenant for repair and maintenance of leased property, those covenants will supersede any implied or common-law covenants and shall determine the responsibilities and liability of the respective parties. McGann v. Murray, 75 Ill.App.3d 697, 393 N.E.2d 1339, 1342, 31 Ill.Dec. 32 (3d Dist. 1979); Hardy v. Montgomery Ward & Co., 131 Ill.App.2d 1038, 267 N.E.2d 748, 751 (5th Dist. 1971). An express covenant to repair will not be enlarged by construction. Kaufman v. Shoe Corporation of America, 24 Ill.App.2d 431, 164 N.E.2d 617, 620 (3d Dist. 1960). The ordinary meaning of the word “repair” is to fix, mend, or put together that which is torn or broken. It involves the idea of something preexisting that has been affected by decay. Sandelman v. Buckeye Realty, Inc., 216 Ill.App.3d 226, 576 N.E.2d 1038, 1040, 160 Ill.Dec. 84 (1st Dist. 1991).

A general covenant of a tenant to keep the premises in repair merely binds the tenant to make only ordinary repairs reasonably required to keep the premises in good condition. Quincy Mall, Inc. v. Kerasotes Showplace Theatres, LLC, 388 Ill.App.3d 820, 903 N.E.2d 887, 230, 328 Ill.Dec. 227 (4th Dist. 2009); Sandelman, supra, 576 N.E.2d at 1040. It does not make the tenant responsible for making structural repairs. Kaufman, supra, 164 N.E.2d at 620; Expert Corp. v LaSalle National Bank, 145 Ill.App.3d 665, 496 N.E.2d 3, 5, 99 Ill.Dec. 657 (1st Dist. 1986); Mandelke v. International House of Pancakes, Inc., 131 Ill.App.3d 1076, 477 N.E.2d 9, 12, 87 Ill.Dec. 408 (1st Dist. 1985).

Alterations or additions of a structural or substantial nature that are made necessary by extraordinary or unforeseen future events not within the contemplation of the parties at the time of lease execution are ordinarily the responsibility of the landlord. Expert Corp., supra, 496 N.E.2d at 5. Likewise, renewals or replacements that would last a lifetime rather than maintain the condition of the premises are extraordinary repairs outside the scope of a tenant’s obligations under a general covenant of repair. Sandelman, supra, 576 N.E.2d at 1040; Schultz Bros. v. Osram Sylvania Products, Inc., No. 10 C 2995, 2011 WL 4585237 at *3 (N.D.Ill. Sept. 30, 2011). When a deficiency is so substantial and unforeseen that it would be unreasonable to expect the tenant to make repairs that basically benefit not the tenant but the landlord, those repairs may be deemed structural. Baxter, supra, 380 N.E.2d at 835.

In order to shift to the tenant the responsibility to make structural or extraordinary repairs to the leased premises, a lease must

clearly and unambiguously state that the obligation to make those structural or extraordinary repairs is that of the tenant and not of the landlord. When the lease explicitly shifts the burden to the tenant, however, by requiring the tenant to make all repairs and replacements, ordinary and extraordinary, structural and nonstructural, the provision will be enforced against the tenant in accordance with its clear meaning. Schultz Bros., supra, 2011 WL 4585237 at *3, citing Sandelman, supra, 576 N.E.2d at 1040. See also Quincy Mall, supra, 903 N.E.2d at 1040; Kallman v. Radioshack Corp. 315 F.3d 731, 738 (7th Cir. 2002).

 A. Common Issues Involving the Duty To Repair

1. Roof Replacement

An ordinary covenant requiring a tenant to keep the premises in good repair does not include a requirement that the tenant replace a roof that has become so weathered or run down that it cannot be repaired. Sandelman v. Buckeye Realty, Inc., 216 Ill.App.3d 226, 576 N.E.2d 1038, 1040, 160 Ill.Dec. 84 (1st Dist. 1991).

2. Plaster Walls and Ceiling

An ordinary covenant requiring a tenant to keep the premises in good repair will require tenant to repair plaster falling from a ceiling. Plaster is not a structural element of a building. Falling plaster cannot be considered to be so substantial or unforeseeable as to transform it into a structural element requiring repair by the landlord. Baxter v. Illinois Police Federation, 63 Ill.App.3d 819, 380 N.E.2d 832, 835, 20 Ill.Dec. 623 (1st Dist. 1978); Hardy v. Montgomery Ward & Co., 131 Ill.App.2d 1038, 267 N.E.2d 748, 751 (5th Dist. 1971).

In contrast, if the wall (or ceiling) itself needs to be replaced, the obligation to reconstruct a defective wall would not fall on the tenant under a general covenant of repair. Expert Corp. v. LaSalle National Bank, 145 Ill.App.3d 665, 496 N.E.2d 3, 5, 99 Ill.Dec. 657 (1st Dist. 1986). The Expert court reasoning that “reconstruction” means to rebuild, not merely to repair.

3. Heating Systems

Conversion and replacement of a heating system to a new type of heating system because the existing system has been discontinued may not be covered by a tenant’s duty to repair under a general covenant of repair. Baxter v. Illinois Police Federation, 63 Ill.App.3d 819, 380 N.E.2d 832, 835, 20 Ill.Dec. 623 (1st Dist. 1978); Kaufman v. Shoe Corporation of America, 24 Ill.App.2d 431, 164 N.E.2d 617, 620 (3d Dist. 1960).

B. Landlord’s Control and Obligation To Maintain

When a landlord retains control of portions of the premises leased to the tenant, absent an express provision to the contrary in the lease, the landlord, as the party in control, is obligated to use ordinary care to maintain that portion of the premises in a reasonably safe condition. Vesey v. Chicago Housing Authority, 145 Ill.2d 404, 583 N.E.2d 538, 541 – 542, 164 Ill.Dec. 622 (1991); McCoy v. Chicago Housing Authority, 333 Ill.App.3d 305, 775 N.E.2d 168, 170, 266 Ill.Dec. 606 (1st Dist. 2002).

C. Independence of Tenant’s Obligation To Pay Rent and Landlord’s Duty To Repair

“The general rule in Illinois, as elsewhere, is that the obligation to pay the rent and the covenant to make repairs are separate and independent covenants and that the failure to make repairs does not discharge the obligation to pay the rent.” Zion Industries, Inc. v. Loy, 46 Ill.App.3d 902, 361 N.E.2d 605, 608, 5 Ill.Dec. 282 (2d Dist. 1977). However, if the failure to repair is of such a serious nature as to constitute a constructive eviction — even a partial constructive eviction — the obligation to pay rent is suspended. Id.; Goldberg v. Cosmopolitan National Bank of Chicago, 33 Ill.App.2d 83, 178 N.E.2d 647, 649 (1st Dist. 1961).

Since a tenant must vacate the premises to claim constructive eviction, the tenant’s liability for rent will continue as long as possession is continued, even if the landlord has committed acts justifying abandonment of the premises. Zion Industries, supra, 361 N.Ed.2d at 608; Automobile Supply Co. v. Scene-in-Action Corp., 340 Ill. 196, 172 N.E. 35, 38 (1930).

D. Breach of Landlord’s Covenant To Make Repairs

In American National Bank & Trust Company of Chicago v. K-Mart Corp., 717 F.2d 394 (7th Cir. 1983), the Seventh Circuit Court of Appeals analyzed Illinois law as it applies to a landlord’s breach of its obligations under a lease to repair and maintain the leased premises. “Under Illinois law, a tenant has various remedies available on breach of landlord’s covenant to repair. The tenant may (1) abandon the premises if they become untenantable by reason of the breach, (2) remain in possession and recoup damages in an action for rent, (3) make the repairs and deduct the cost from the rent or sue landlord for the cost, or (4) sue landlord for breach of the covenant and recover the damages usually measured by the difference between the rental value of the premises in repair and out of repair.” 717 F.2d at 398, citing Book Production Industries, Inc. (Consolidated Book Publishers Division) v. Blue Star Auto Stores, Inc., 33 Ill.App.2d 22, 178 N.E.2d 881, 885 (2d Dist. 1961).

The measure of damages is the difference between the rental value of the premises if kept in the condition of repair required by the landlord’s covenant and the rental value of the premises in the condition in which they actually are, plus any special damages. Zion Industries, supra, 361 N.E.2d at 612; Oppenheimer v. Szulerecki, 297 Ill. 81, 86, 119 N.E. 643, 327 (1921).

“This theory of damages is known as diminution of rental value and reflects the sum a tenant is entitled to recover to restore him to the position he would have been in had he received the benefit of his bargain, that is, the benefit of premises in repair.” K-Mart Corp., supra, 717 F.2d at 399. The question of rental value, both for premises in and out of repair, is the proper subject of expert testimony. City of Chicago v. Bank of Ravenswood, 93 Ill.App.3d 52, 416 N.E.2d 1115, 1118 – 1119, 48 Ill.Dec. 593 (1st Dist. 1981); K-Mart Corp., supra, 717 F.2d at 400.

CONCLUSION

Although commercial Tenants often believe their landlord is obligated to make repairs to elements located within the Tenant’s commercial space, so long as the item needing repair is non-structural, it is typically the tenant’s duty to repair at the Tenant’s expense.