mediation of landlord-tenant disputes: new hope for the

MEDIATION OF LANDLORD-TENANTDISPUTES: NEW HOPE FOR THE

IMPLIED WARRANTY OFHABITABILITY?

PETER W. SALSICH, JR.t

AND PATRICK W. FITZGERALDt

I. INTRODUCTION

The twenty-year revolution in residential landlord-tenant law,epitomized by the implied warranty of habitability, has transformedthe law in over forty states, including the member states of theEighth Circuit Court of Appeals.' In the past three years, Missouri

t Professor of Law, Saint Louis University School of Law. J.D., Saint LouisUniversity; A.B., University of Notre Dame. Professor Salsich is a member of theBoard of Directors of the Neighborhood Dispute Center of Metropolitan St. Louis.

I M.A., University of Chicago; B.A., Saint Louis University. Mr. Fitzgerald is amember of the 1987 class at Saint Louis University School of Law.

1. Fusco, Damages for Breach of the Implied Warranty of Habitability in Illi-nois - A Realistic Approach 55 CHI.-KENT L. REV. 337, 344 n.44 (1979). See Javins v.First Nat'l Realty Corp., 429 F.2d 1071, 1092 (D.C. Cir.), cert. denied, 400 U.S. 925(1970); Green v. Superior Court, 10 Cal. 3d 616, 618, 517 P.2d 1168, 1170, 111 Cal. Rptr.704, 706 (1974); Stack v. Harris, 111 Ga. 149, -, 36 S.E. 615, 616 (1906); Givens v. Gray,126 Ga. App. 309, -, 190 S.E.2d 607, 608 (1972); Lemle v. Breeden, 51 Hawaii 426, -,462 P.2d 470, 472 (1969); Jack Spring, Inc. v. Little, 50 Ill. 2d 351, -, 280 N.E.2d 208, 215(1972); Mease v. Fox, 200 N.W.2d 791, 794 (Iowa 1972); Steele v. Latimer, 214 Kan. 329,-, 521 P.2d 304, 307 (1974); Boston Hous. Auth. v. Hemingway, 343 Mass. 184, -, 293N.E.2d 831, 837 (1973); Rome v. Walker, 38 Mich. App. 458, -, 196 N.W.2d 850, 853(1972); Fritz v. Warthen, 298 Minn. 54, -, 213 N.W.2d 339, 340 (1973); Detling v. Edel-brock, 671 S.W.2d 265, 268 (Mo. 1984); Kline v. Burns, 111 N.H. 87, -, 276 A.2d 248, 251(1971); Marini v. Ireland, 56 N.J. 130, 265 A.2d 526, 532 (1970); Pugh v. Holmes, 486 Pa.272, -, 405 A.2d 897, 901 (1979); Kamarath v. Bennett, 568 S.W.2d 658, 660 (Tex. 1978);Foisy v. Wyman, 83 Wash. 2d 22, -, 515 P.2d 160, 163 (1973); Pines v. Perssion, 14 Wis.2d 590, -, 111 N.W.2d 409, 412 (1961); ALASKA STAT. §§ 34.03.160, .180 (1985); ARIZ.REV. STAT. ANN. §§ 33-1324, -1361 (1974); CAL. CIv. CODE §§ 1941-1942 (West 1974);CONN. GEN. STAT. ANN. § 47a-7 (West Supp. 1985); FLA. STAT. ANN. §§ 83.51, .54 (WestSupp. 1985); GA. CODE ANN. 61-111 to -112 (Cum. Supp. 1985); HAWAII REV. STAT.§§ 521-42 (1976 & Supp. 1984); IOWA CODE ANN. § 526A.17 (West 1985); KAN. STAT.ANN. § 58-2553 (1983); Ky. REV. STAT. ANN. §§ 383.595, .625 (Baldwin 1981); ME. REV.STAT. ANN. tit. 14, § 6021 (Supp. 1985); MD. REAL PROP. CODE ANN. § 8-211 (1981), su-perseded by both BALTIMORE, MD., CITY PUBLIC LOCAL LAWS §§ 9-9 to -10, 10-14.1, (eff.July 1, 1971), cited in Parkington Apartments, Inc. v. Cordish, 296 Md. 143, -, 460A.2d 52, 57 (1983) and MONTGOMERY COUNTY, MD.. CODE, FAIR LANDLORD-TENANT RE-LATIONS, § 93A (eff. Nov. 21, 1972); MASS. GEN. LAWS ANN. ch. 239, § 8A (West Supp.1985); MICH. COMP. LAWS ANN. § 554.139 (Supp. 1985); MINN. STAT. ANN. § 504.18(West Supp. 1986); NEV. REV. STAT. §§ 76-1419 to -1425 (Reissue 1981); NEB. REV. STAT.§§ 118A, 290, 360 (Reissue 1977); N.H. REV. STAT. ANN. § 48-A:14 (Cum. Supp. 1985):N.J. STAT. ANN. §§ 2A:42-85 to -95 (Cum. Supp. 1985); N.M. STAT. ANN. § 47-8-20 (Cum.Supp. 1985); N.Y. REAL PROP. LAW § 235-b (McKinney Supp. 1986); N.C. GEN. STAT.

CREIGHTON LAW REVIEW

has joined these states with three important, but little-publicizedchanges. During 1983, the state legislature enacted sweeping changesin the condominium law, which included protections for low income,disabled, and elderly tenants in buildings being converted into condo-miniums.2 The legislature also enacted a new statute regulating theuse of security deposits. 3 In the spring of 1984, the Missouri SupremeCourt acknowledged the changes in attitude, in Detling v. Edelbrock,4

a case which, by its own admission, was poorly presented. 5 TheDetling decision was used as the vehicle for the sweeping declarationthat an implied warranty of habitability is included in all residentialtenancies in Missouri.6 This legal doctrine shifts responsibility fromthe tenant to the landlord for the condition of leased residentialpremises. 7 Prior to the judicial and legislative activism that began in1961, a rule similar to the rule of caveat emptor applied to all land-lord-tenant relationships.8 The landlord ordinarily did not promise,expressly or impliedly, that the premises were safe or fit for their in-tended use.9

While the revolution in residential landlord-tenant law has re-sulted in one of the quickest and most dramatic changes in Americanhistory to a major aspect of law, it has not produced the improvementin housing standards for low- and moderate-income families that its

§ 42-42 (1984); N.D. CENT. CODE § 47-16-13.1 (1978); OHIO REV. CODE ANN. §§ 5321.04,.07 (Baldwin 1980); OR. REV. STAT. § 91.770, .800-.815 (1985); PA. STAT. ANN. §§ tit. 68P.S. 250.552-.554 (Purdon Cum. Supp. 1985); R.I. GEN. LAWS § 34-18-16 (1969); TENN.CODE ANN. § 68-40-102 (1983); VT. STAT. ANN. tit. 12, § 4859 (1973); VA. CODE §§ 55-248.13, .25 (1981); WASH. REV. CODE ANN. § 59.18.060 (Supp. 1986); W. VA. CODE § 37-6-30 (1985); WIS. STAT. ANN. § 704-07 (West Cum. Supp. 1985). See also Hilder v. St. Pe-ter, 144 Vt. 150, -, 478 A.2d 202, 206-09 (1984) (providing an excellent historical analy-sis of doctrine of implied warranty of habitability).

2. Mo. ANN. STAT. §§ 448.1-101 to .4-120 (1986).3. Mo. REV. STAT. § 535.300 (Vernon Supp. 1986).4. 671 S.W.2d 265 (Mo. 1984) (en banc).5. Id. at 268.6. Id. at 270 (quoting King v. Moorehead, 495 S.W.2d 65, 75 (Mo. Ct. App. 1973).

In Mobil Oil Credit Corp. v. DST Realty, Inc., 689 S.W.2d 658 (Mo. Ct. App. 1985), thecourt of appeals, citing Detling, ruled that the implied warranty of habitability is notapplicable to leases of commercial property. Id. at 659.

7. Mease v. Fox, 200 N.W.2d 791, 796 (Iowa 1972) (holding that Iowa recognizesimplied warranty of habitably with respect to residential rental property); Fritz v.Warthen, 298 Minn. 54, 213 N.W.2d 339, 340-41 (Minn. 1973) (construing statutory war-ranty of habitability for residential rental property); Detling, 671 S.W.2d at 268 (hold-ing that Missouri recognizes implied warranty of habitability). There does not appearto be any case law construing the statutes which provide for implied warranty of habit-ability for residential leases in Nebraska, North Dakota, or South Dakota. Addition-ally, both Arkansas and North Dakota recognize an implied warranty of habitabilitywith respect to the sale of new residential real estate. See Wawak v. Stewart, 247 Ark.1093, -, 449 S.W.2d 922, 923 (1970); Powers v. Martinson, 313 N.W.2d 720, 724 (N.D.1981).

8. See Pines v. Perssion, 14 Wis. 2d 590, -, 111 N.W.2d 409, 412 (1961).9. Id.

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leaders expected.10 Legal literature is replete with analysis and com-mentary about the implied warranty of habitability as a legal conceptand about the expectations that were created by it." In many loca-tions, the results have fallen far short of the expectations. 12 Empiri-cal studies in Boston, Chicago, Detroit, and San Francisco, as well asobservations of activity in Kansas City and St. Louis, have noted adisappointing, harsh, but observable reality: landlord-tenant law re-form, as administered by the courts, has not improved the housingconditions of low- and moderate-income tenants. 13 One of the mostdistressing findings is the evidence that some courts, responsible foradministering landlord-tenant law, have taken a hostile view to thedoctrine of implied warranty of habitability or have ignored the doc-trine and its attendant tenant remedies. 14

This Article does not attempt to reanalyze this problem but, in-stead, looks at a parallel development, alternative dispute resolution,as a possible approach to the administration of the new landlord-ten-ant law. This approach may enable some of the hopes regarding bet-ter housing to be realized. Some particular characteristics of theresidential landlord-tenant relationship, particularly with respect tothe low- and moderate-income tenants in urban environments, sug-

10. See Abbott, Housing Policy, Housing Codes and Tenant Remedies: An Inte-gration, 56 B.U.L. REV. 1, 2 (1976); Heskin, The Warranty of Habitability Debate: ACalifornia Case Study, 66 CALIF. L. REV. 37, 38 (1978); Note, The Great Green Hope:The Implied Warranty in Practice, 28 STAN. L. REV. 729, 776 (1976).

11. See Ackerman, Regulating Slum Housing Markets on Behalf of the Poor: OfHousing Codes, Housing Subsidies and Income Redistribution Policy, 80 YALE L.J.1093, 1101 (1971); Hirsh, Hirsh, & Margolis, Regression Analysis of the Effects of Habit-ability Laws Upon Rent: An Empirical Observation on the Ackerman-Komesar De-bate, 63 CALIF. L. REV. 1098, 1104-15 (1975).

12. Mosier & Soble, Modern Legislation, Metropolitan Court, Miniscule Results:A Study of Detroit's Landlord-Tenant Court, 7 U. MICH. J.L. REF. 8, 61-63 (1973).

13. Klein, The Politics of Housing-Dispute Resolution: An Academic Perspective,17 URB. L. ANN. 353, 363 (1979). Klein cited a two-year, systematic, court-watchingstudy of the Chicago Eviction Courts, S.J. MANSFIELD, JUDGMENT LANDLORD: ASTUDY OF EVICTION COURT IN CHICAGO 1 (1978). Klein concluded that actual policyoutcomes have failed to meet the objective of giving tenants greater leverage in theirstruggle for decent housing. He stated: "The chief reason for this failure is the way inwhich the Forcible Entry and Detainer Court proceedings have virtually ignored thehabitability doctrine and other tenant remedies." Supra, at 363. The empirical studiesby Mansfield indicated that landlords won 80% of the cases in the Cook County Forci-ble Entry and Detainer Court. There is no statistical relationship between winningand the appearance or nonappearance of tenants, their assertion or waiver of defenses,or the nature of the defenses they assert. Tenants attempting to assert the impliedwarranty of habitability doctrine have the same high probability of losing as do thoseclaiming paid rent or technical defenses, such as insufficiency of notice or service ofprocess. See Klein, supra, at 363.

14. Klein, supra note 13, at 363 (citing S.J. MANSFIELD, supra note 13, at 1). TheChicago courts sometimes have greeted tenants who are attempting to assert the im-plied warranty of habitability as a defense with the admonition that, if their apart-ments are so bad, why would they want to continue staying there. Id.

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gest that alternatives to litigation as a means of resolving disputesand administering this relationship have greater potential for successthan a continued tinkering with the litigation process.' 5

The basic landlord-tenant concept is a traditional form of sharingproperty in which the landlord transfers possession of the property tothe tenant in return for the tenant's agreement to pay rent and tocare for the property. Under the traditional common law, the tenantwas said to take all of the basic responsibilities that go with posses-sion.16 This meant that, if a leak developed in the ceiling, or if bugsshowed up in the kitchen, or if the heat did not function properly,the tenant was responsible because the tenant had possession andcontrol of the property. 17 The landlord typically had exhausted hisresponsibilities once the tenant took possession.

Because the landlord remains the owner of the property, a com-plexity is introduced into this relationship. Two people share theproperty "bundle" represented by the leased premises. The landlordhas an obligation not to harm the tenant's possessory interest, whilethe tenant has both an obligation not to harm the landlord's owner-ship interest and an obligation to pay rent. The technical articula-tion of the tenant's responsiblity is that the tenant may not commitwaste. 18 Most written leases incorporate the tenant's responsibilitythrough language providing that the tenant agrees to return theproperty in the same condition as received, normal wear and tear ex-cepted. When a dispute develops involving allegations that waste hasbeen committed, the security deposit usually becomes the center ofattention.

19

Another point of importance, particularly with respect to resi-dential rental property occupied by families of low- and moderate-in-

15. See Hiles, The Implied Warranty of Habitability: A Dream Deferred, 48UMKC L. REV. 237, 257 (1979). Presently, Missouri law permits a landlord to keep atenant's security deposit if: (1) the tenant has defaulted in rent and the lease providesthat the security deposit may be used for that purpose; (2) it is necesary to restore theunit to its previous condition, normal wear and tear excepted; or (3) the landlord needsto be compensated for actual damages as a result of the tenant's failure to give reason-able notice of intent to terminate. Mo. ANN. STAT. § 535.300 (Vernon Supp. 1986).

16. See Hicks, The Contractual Nature of Real Property Leases, 24 BAYLOR L.REV. 443, 449-51 (1972).

17. That traditional concept goes back to the original landlord-tenant conceptwhich developed in England during the twelfth century. In a sense, there is approxi-mately an 800-year-old tradition of the tenant's being responsible once the tenant pos-sesses the property. See id.

18. RESTATEMENT (SECOND) OF PROPERTY ch. 12, introductory note at 383-84(1978). In some situations, hammering a nail into a wall to hang a picture could consti-tute waste, particularly when, in the process, the tenant cracks the plaster. Few ten-ants would think that this activity would constitute waste. However, many landlordsmight disagree.

19. See note 15 supra.

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come, is that short-term tenancies often are created by oralagreements. Most states require written leases for tenancies that areone year or longer in duration.20 Many low- and moderate-incomeurban tenants occupy housing under oral arrangements that can beterminated by either party at the end of a rental period, which is usu-ally one month in duration. Traditionally, landlord-tenant law fo-cused on the administration of the termination process byconcentrating on notice requirements, summary eviction proceedings,and regulation of the use of self-help.2 1

The first part of this Article reviews the current status of resi-dential landlord-tenant law in the Eighth Circuit states. The secondpart discusses the use of mediation to assist in the administration ofthe new landlord-tenant law.

II. RESIDENTIAL LANDLORD-TENANT LAWIN THE EIGHTH CIRCUIT

A. THE IMPLIED WARRANTY OF HABITABILITY

1. Detling v. Edelbrock

Legislation enacted in 1983 which regulates security deposits andcondominium conversions and modifies conviction notice proceduresand a 1984 decision of the Missouri Supreme Court which recognizesthe implied warranty of habitability for residential tenancies havechanged drastically the face of landlord-tenant law in Missouri.22

While these changes have received very little public discussion, theyhave established a firm foundation for a serious examination of newapproaches to resolving landlord-tenant disputes.

In Detling v. Edelbrock,2 3 the Missouri Supreme Court adoptedthe implied warranty of habitability as to residential leases. 24 In thiscase, the supreme court followed the reasoning of an earlier appellatecourt decision in ruling that the implied warranty of habitability ex-ists as to leases of property for residential purposes.25 The court heldthat, as a matter of public policy:

[A] landlord warrants "that the dwelling is habitable and fitfor living at the inception of the [lease] and that it will re-main so during the entire term. The landlord warrants that

20. Most states have enacted statutes based upon the English Statutes of Fraudsand Perjuries, 29 Car. II, ch.3 (1677), requiring conveyances of land for longer than ayear's duration to be in writing.

21. E.g., Mo. REV. STAT. §§ 534-535 (1979).22. See notes 2-3 and accompanying text supra, and note 24 and accompanying

text infra.23. 671 S.W.2d 265 (Mo. 1984).24. Id. at 268-69.25. Id. at 270 (quoting King v. Moorehead, 495 S.W.2d 65, 75 (Mo. Ct. App. 1973)).

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he will provide facilities and service vital to the life, healthand safety of the tenant and to the use of the premises forresidential purposes. '26

In Detling, several tenants sued their landlord, seeking specificperformance of express and implied covenants in the rental agree-ment. In Count I, the tenants claimed damages for their "enormousannoyance, discomfort, frustration, mental anxiety and mental dis-tress" and asked the court to abrogate the landlord tort immunitydoctrine. 27 In Count II, the tenants sought actual damages for thebreach of the implied warranty of habitability. Specifically, the ten-ants alleged that the Kansas City Property Maintenance and FirePrevention Codes had been violated.28 These violations includedsuch things as "roach and rodent infestation, missing screens, ex-posed wiring, boiler malfunctions, water leakage, rubbish strewn inpassageways, and unstable steps. '29 In addition to damages, the ten-ants sought the "appointment of a receiver... to collect and managethe rental payments until violations of the housing codes had beenrectified."30 The court appointed a receiver. However, he was unableto secure loans, so the court ordered him only to collect the rents andordered the landlord to make all necessary repairs.31

In its opinion, the Missouri Supreme Court traced the history ofthe implied warranty of habitability for residential leases.32 Thecourt noted that Missouri had "evolved beyond traditional commonlaw precepts in several relevant respects. It is now accepted that alease is both a conveyance and a contract. ' 33 The court stated that ithad already rejected the caveat emptor rule as to the sale of new resi-dences. Instead, the court held "that a vendor-builder impliedly war-rants the home's fitness for use as a residence." 34 The court alsonoted that "it is common knowledge that counties and municipalitiesthroughout the state have enacted housing and property maintenancecodes which impose on property owners, including landlords, respon-sibilities with respect to the maintenance of property unknown to the

26. Id. (quoting King, 495 S.W. 2d at 75). In King, the Missouri Court of Appealsfor the Western District adopted the implied warranty of habitability for residentialleases. King, 495 S.W.2d at 70.

27. Detling, 671 S.W.2d at 268.

28. Id.29. Id. at 270.30. Id. at 267.31. Id. The court noted that, within a few months after the repairs were made,

there were further housing code violations and that most of the tenants then had va-cated the premises." Id.

32. Id. at 269.33. Id. (citations omitted).34. Id. (citing Smith v. Old Warson Dev. Co., 479 S.W.2d 795, 799 (Mo. 1972)).

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common law.35 The court expressed that the "legislature [had] madeit the policy of this state to encourage compliance with local housingand building regulations. '36

The court also approved other rationales for replacing the com-mon law with an implied warranty of habitability for residentialleases. The court recognized that, presently, tenants have a reason-able expectation that the premises will be fit for habitation. Thecourt expressed the belief that tenants are generally unable to in-spect rental properties fully or to maintain them during the term ofthe lease. The court commented that tenants are seeking more thanthe mere possession of the property from their leases.37

Pursuant to its findings, the court specifically held:

A landlord warrants that the dwelling is habitable and fit forliving at the inception of the [lease] and that it will remainso during the entire term. [T]he landlord warrants that hewill provide facilities and service vital to the life, health andsafety of the tenant and to the use of the premises for resi-dential purposes. 38

This warranty extends to the common area as well as to the individ-ual dwelling units.39

The court also defined the necessary elements for a cause of ac-tion alleging a breach of the implied warranty of habitability. Thecourt stated that such a cause must include facts which show: "(1)entry into a lease for residential property; (2) subsequent develop-ment of dangerous or unsanitary conditions on the premises materi-ally affecting the life, health and safety of the tenant; (3) reasonablenotice of the defects to the landlord; and (4) subsequent failure to re-store the premises to habitability. '40

In its decision, the court further stated that "[h]abitability is tobe measured by community standards, reflected in most cases in local

housing and property maintenance codes. ' 41 The court, however, ad-ded that there must be a breach of the codes which effectively makesthe premises unsafe or unsanitary. Minor code violations are to beviewed as being de minimus.42 Courts should consider the age of thebuilding, the nature and duration of the defects, and the impact of

35. Id. at 269.36. Id. at 269. The court was speaking of the Missouri Enforcement of Minimum

Housing Code Standards Act. Id. (citing Mo. REV. STAT. §§ 441.510-.640 (Vernon1978)).

37. Id. at 272 n.7.38. Id. at 270 (quoting King, 495 S.W.2d at 75).39. Id. (quoting King, 495 S.W.2d at 76).40. Id.41. Id. See also note 33 and accompanying text supra.42. Detling, 671 S.W.2d at 270 (quoting King, 495 S.W.2d at 76).

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these defects on the well-being of the tenants.43

The court refused to consider the plaintiffs' challenge to thelandlord tort immunity doctrine since it believed that the impliedwarranty of habitability provides adequate remedies to tenants. It,however, hinted broadly that it would reconsider that doctrine in ap-propriate circumstances. 44 The court limited a landlord's responsi-bilities by providing that a landlord would not be responsible for anydefects arising from the tenant's own wrongful conduct or for defectswhich are unknown to the landlord, unless the tenant has notifiedthe landlord of these defects and has permitted him a reasonabletime for their correction. 45

With the Missouri Supreme Court's decision, all states in theEighth Circuit have adopted the implied warranty of habitability inone form or another.4 6 While the degree, the methodology, and theterms used vary from'state to state, the basic theme is the same. Inadopting the implied warranty of habitability, some states have usedstatutes, some have used case law, while others have used a combina-tion of the two. Regardless of the method employed, most of thestates have used the phrase "duty to repair" when speaking of theimplied warranty (or covenant) of habitability.

2. Statutory Enactment of the Warranty

With the exception of Arkansas and Missouri, the Eighth Circuitstates have provided for an implied warranty of habitability throughlegislation. 47 Although not worded identically, these statutes gener-ally require landlords to maintain and repair the leased premises.Iowa and Nebraska have adopted the Uniform Residential Landlordand Tenant Act with only minor variations in language.48 WhileMinnesota has not adopted the title of the Act, most of its languagetracks that of the Act.49 North Dakota and South Dakota both havesimilar statutory provisions concerning a landlord's duty to repair

43. Id. (quoting King, 495 S.W.2d at 76).44. Id. at 268. The court stated: "We decline to undertake a full blown review of

the landlord tort immunity doctrine when appellants have available to them an ade-quate remedy." Id.

45. Id. at 270 (quoting King, 495 S.W.2d at 76).46. See, e.g., Wawak v. Stewart, 247 Ark. 1093, -, 449 S.W.2d 922, 926 (1970) (sale

of new homes); Mease v. Fox, 200 N.W.2d 791, 796 (Iowa 1972) (residential rental prop-erty); Fritz v. Warthen, 298 Minn. 54, -, 213 N.W.2d 339, 341 (1973) (statutory war-ranty for residential rental property); IOWA CODE § 562A.15 (1985); MINN. STAT. ANN.§ 504.18, subd. 1 (West Supp. 1986); NEB. REV. STAT. § 76-1419 (Reissue 1981); N.D.CENT. CODE § 47-16-13.1 (1978); S.D. CODIFIED LAws ANN. § 43-32-8 (1983).

47. See statutes cited note 43 supra.48. IOWA CODE §§ 562A.1-.37 (West 1985); NEB. REV. STAT. §§ 76-1401 to -1449 (Re-

issue 1981).49. MINN. STAT. ANN. §§ 504.18-.28 (West Supp. 1986).

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and maintain the leased premises.50 Although their language doesnot follow that of the Act, North Dakota and South Dakota effec-tively have created an implied warranty of habitability for residentialleases.

51

These states which have statutorily adopted the implied war-ranty of habitability have specified that the landlord must maintainthe premises in a fit and habitable condition.52 Iowa, Nebraska,North Dakota, and South Dakota also use the traditional languagewhich requires a landlord to put the tenant into quiet possession ofthe premises. 53 Each of these statutes additionally refers to localbuilding and housing codes.54 Furthermore, most of theses states ex-pressly require the landlord to comply with these codes.5 5 South Da-kota again differs by specifying that the state law will be in additionto any covenants or conditions imposed by law or ordinance or by theterms of the lease.56 In addition to the general admonition to keepthe premises fit and habitable, the five states' statutes also expresslyrequire the landlord to maintain the common areas in a safe andclean condition.

5 7

Iowa, Nebraska, North Dakota, and South Dakota also expresslyrequire the landlord to provide essential services.5 8 These servicesinclude heat, electricity, and running water.5 9 North Dakota also hasa more extensive list of required services which include sanitary fa-cilities, elevators, air-conditioning, and hot water.60 While Minnesotadoes not expressly require a landlord to provide essential services, it,

50. N.D. CENT. CODE §§ 47-16-07.1 to -16-17 (1978); S.D. CODIFIED LAWs ANN.§§ 43-32-1 to 32-26 (1983).

51. N.D. CENT. CODE § 47-16-13.1 (1978); S.D. CODIFIED LAWS ANN. § 43-32-8(1983).

52. IOWA CODE § 562A.15(1)(b) (1985); MINN. STAT. ANN. § 504.18, subd. 1(a) (WestSupp. 1986); NEB. REV. STAT. § 76-1419(1)(b) (Reissue 1981); N.D. CENT. CODE § 47-16-13.1 (1978); S.D. CODIFIED LAWS ANN. § 43-32-8 (1983).

53. IOWA CODE § 562A.14 (1985); NEB. REV. STAT. § 76-1426 (Reissue 1981); N.D.CENT. CODE § 47-16-08 (1978); S.D. CODIFIED LAWs ANN. § 43-32-6 (1983).

54. IOWA CODE § 562A.15(1)(a) (1985); MINN. STAT. ANN. § 504.18, subd. 1(c); NEB.REV STAT. § 76-1419(1)(a); N.D. CENT. CODE § 47-16-13.1(1)(a) (1978); S.D. CODIFIEDLAWS ANN § 43-32-8 (1983).

55. IOWA CODE § 562A.15(1)(a) (West 1985); MINN. STAT. ANN. § 504.18, subd. 1(a);N.D. CENT. CODE § 47-16-13.1(1)(a) (1978).

56. S.D. CODIFIED LAWS ANN. § 43-32-8 (1983).57. IOWA CODE § 562A.15(1)(c) (1985); MINN. STAT. ANN. § 504.18, subd. 1(a) (West

Supp. 1986); NEB. REV. STAT. § 76-1419(1)(c) (Reissue 1981); N.D. CENT. CODE § 47-16-13.1(1)(c) (1971); S.D. CODIFIED LAWS ANN. § 43-32-8 (1983).

58. IOWA CODE 562A.15(1)(d)-(f) (1985); NEB. REV. STAT. § 76-1419(1)(d)-(f) (Reis-sue 1981); N.D. CENT. CODE § 47-16-13.1(1)(d)-(f) (1978); S.D. CODIFIED LAWS ANN.§ 43-32-8 (1983).

59. IOWA CODE § 562A.23 (1985); NEB. REV. STAT. § 76-1427 (Reissue 1981); N.D.CENT. CODE § 47-16-13.1(1)(f) (1978); S.D. CODIFIED LAWS ANN. § 43-32-6 (1983).

60. N.D. CENT. CODE §§ 47-16-13.1(1)(d)-(f) (1978).

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along with Iowa, Nebraska, and South Dakota, prohibits the unlawfulor wrongful termination of essential services or utilities by alandlord.

61

The states which statutorily have created the implied warrantyof habitability also have some provision for tenant responsibilities.Each state, with the exception of Minnesota, expressly asserts thatthe tenant must keep the premises clean and safe and must use theutilities and services in a reasonable manner.62 The statutes,although using different terminology, also state that the tenant is notto damage the landlord's property.63 Minnesota addresses this last is-sue indirectly, stating that the landlord is not to be held liable fordamage done by the tenant.64 North Dakota extends tenant responsi-bilities further than the other states by including the requirementthat a tenant must comply with all applicable housing codes pertain-ing to a tenant's conduct. 65

Iowa, Minnesota, Nebraska, and South Dakota have express pro-visions within their statutes which preclude the waiver or modifica-tion of these statutes.66 North Dakota does not precludemodifications directly but does so indirectly by authorizing variousremedies should a court find a lease clause unconscionable. 67 Despitethe prohibitions against exculpatory lease clauses, all of these statespermit the landlord and tenant to agree as to the tenant's makingcertain specified repairs.68 The only differences between the statesare their evidentiary requirements, such as the necessity for a sepa-rate, signed writing, the necessity for the agreement to be supportedby consideration or in lieu of rent, and the various requirements forgood faith in the making of the agreements. 69 South Dakota furtherpermits a tenant to repair and deduct the cost of the repairs from

61. IOWA CODE § 562A.23 (1985); MINN. STAT. ANN. § 504.25 (West Supp. 1986);NEB. REV. STAT. § 76-1427 (Reissue 1981); S.D. CODIFIED LAWS ANN. § 43-32-6 (1983).

62. IOWA CODE § 562A.15(2)-(4) (1985); NEB. REV. STAT. § 76-1421 (Reissue 1981);N.D. CENT. CODE § 47-16-13.2 (1978); S.D. CODIFIED LAWS ANN. § 43-32-10 (1983).

63. IOWA CODE § 562A.17(6) (1985); NEB. REV. STAT. § 76-1421(b) (Reissue 1981);N.D. CENT. CODE § 47-16-13.2(6) (1978); S.D. CODIFIED LAWS ANN. § 43-32-10 (1983).

64. MINN. STAT. ANN. § 504.18, subd. 1 (b)-(c) (West Supp. 1986).

65. N.D. CENT. CODE § 47-16-13.2 (1978).66. IOWA CODE § 562A.11 (1985); MINN. STAT. ANN. § 504.18, subd. 1 (West Supp.

1986); NEB. REV. STAT. § 76-1415 (Reissue 1981); S.D. CODIFIED LAWS ANN. § 43-32-8(1983).

67. N.D. CENT. CODE § 47-16-13.3(1) to -13.3(2) (1978).

68. IOWA CODE § 562A.15(2)-(4) (1985); MINN. STAT. ANN. § 504.18, subd. 2 (WestSupp. 1986); NEB. REV. STAT. § 76-1419(2) to -1419(3) (1981); N.D. CENT CODE § 47-16-13.1(4) to -13.1(5) (1978); S.D. CODIFIED LAWS ANN. § 43-32-8 (1983).

69. IOWA CODE § 562A.15(2)-(4) (1985); MINN. STAT. ANN. § 504.18, subd. 2 (WestSupp. 1986); NEB. REV. STAT. § 76-1419(2) to -1419(3) (Reissue 1981); N.D. CENT. CODE§ 47-16-13.1(4) to -13.1(5) (1983); S.D. CODIFIED LAWS ANN. § 43-32-8 (1983).

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rent due should the landlord fail to make the necessary repairs.7 0

3. Judicial Application of the Warranty

In Arkansas, the courts have not yet applied the implied war-ranty of habitability doctrine to the landlord-tenant relationship, butthey have firmly established the doctrine with respect to purchasesof new homes. 7 1 However, dicta in the 1982 case of Dalrymple v.Fields72 signaled the Arkansas Supreme Court's willingness to ex-tend the implied warranty to residential leases. 73

70. S.D. CODIFIED LAWS ANN. § 43-32-8 (1983).71. In 1970, Arkansas abandoned the caveat emptor rule as to purchasers of new

homes. Wawak v Stewart, 247 Ark. 1093, -, 449 S.W.2d 922, 926 (1970). This case in-volved water damage to a house from rainwater which seeped through air-conditioningducts. The court held that a builder warrants that "the house is structurally safe forthe buyer's intended purpose of living in it." Id. at 923 (quoting House v. Thornton, 76Wash. 2d 428, -, 457 P.2d 199, 204 (1969)).

The implied warranty applies to all parts and systems of a home which involvedesign, installation, or workmanship. Pickler v. Fisher, 7 Ark. App. 125, -, 644 S.W.2d644, 645 (1983). In Arkansas, the warranty permits buyers to pursue three possibleremedies: (1) damages under the warranty; (2) negligence under a tort doctrine; or (3)statutory relief under a strict liability theory. See Wingfield v. Page 278 Ark. 276, -,644 S.W.2d 940, 942 (1983). In order to disclaim any liability, a seller must give expresswarranties which specify standards of workmanship, construction, or habitability. Id.at -, 644 S.W.2d 943.

In discussing the implied warranty of habitability for the purchase of new homes,the Arkansas courts have enumerated two duties of new-home buyers. The first dutyis that the buyer must mitigate any damages arising from a breach of the implied war-ranty by the builder. See Wawak, 427 Ark. at -, 449 S.W.2d at 927 (court limited re-covery due to buyer's failure to mitigate water damage by refusing to install a sumppump). The second duty is that the buyer must notify the builder of any defects. SeePickler, 7 Ark. App. at -, 644 S.W.2d at 646. In Pickler, the court was primarily con-cerned with the extent of the notice required to satisfy the implied warranty of habita-bility. Prior to moving into a new home, the buyers informed the seller-builder ofcertain defects in the premises and again notified the seller-builder of other defectsonly a few days after moving into the house. These notifications detailed eight specificproblems, but the builder failed to correct them. Three months later, the buyersbrought suit, alleging nineteen different defects. In permitting the buyers to recoverfor all nineteen defects, the court looked to the law governing the sales of chattels,stating: "The content of the notification need merely be sufficient to let the sellerknow that the transaction is still troublesome and must be watched." Pickler, 7 Ark.App. at -, 644 S.W.2d at 646 (quoting ARK. STAT. ANN. 85-2-607 comment (1961)).

72. 276 Ark. 185, 633 S.W.2d 362 (1982).73. See id. at -, 633 S.W.2d at 364-65. In Dalrymple, the court was unable to rule

directly on this issue since the question had not been preserved for appeal. See id. at-, 633 S.W.2d at 363. The case concerned an apartment which had caught fire due todefective wiring, although the court actually discussed facts surrounding the event, itstated that the record of the lower court indicated ample evidence to find that thelandlord and former owner had breached the implied warranty of habitability. Id. at-, 633 S.W.2d at 364-65. Arkansas statutes are silent as to the tenant's responsibilitiesfor repairs. See ARK. STAT. ANN. 50-501 to -524 (Supp. 1985). These statutes do noteven speak of repairs or normal wear and tear in determining the return of securitydeposits. Their language merely states that the deposit "may be applied to the pay-ment of accrued unpaid rent and any damages which the landlord has suffered by rea-son of the tenant's noncompliance with the rental agreement." Id. § 50-527.

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The Iowa Supreme Court adopted the implied warranty of habit-ability for residential leases in 1972, 74 six years before the Iowa legis-lature enacted the Uniform Residential Landlord and Tenant Act. InMease v. Fox,75 the tenants had vacated the premises pursuant to acity housing inspector's order which had labelled the premises a nui-sance because there were substantial violations of the housing code,such as falling ceilings. Although the landlord had had two years no-tice to repair the premises, he had failed to do so. The court heldthat a landlord's alleged breach of an implied warranty of habitabilitycan be asserted as a defense or counterclaim to the landlord's suit forrecovery of rent.76 The court said that relevant considerations in dis-cussing the implied warranty of habitability are: whether the defectsviolate local housing laws, regulations, or ordinances; the deficiency'snature; the effects on safety and sanitation; the duration of the defi-ciency; the building's age; the amount of rent; whether the impliedwarranty of habitability was waived by the tenant; or whether the de-ficiency was caused by the tenant's misuse.77

A later Iowa Supreme Court decision, Duke v. Clark,78 held thatthe implied warranty of habitability for residential leases arises byoperation of law upon proof of the lease. 79 In Duke, the tenants suedtheir landlord for personal injury damages resulting from an explo-sion allegedly caused by a backup of sewer gas. The court held thatthe issues of negligence and failure to warn the tenants were juryquestions.8 0 The court stated that the plaintiff need only bear theburden of proving a breach of the warranty.8 1 The court also heldthat it was proper to exclude evidence of a local building code since itwas enacted after the parties had entered into the lease.8 2 The courtdistinguished the instant case from Mease by noting that the septictank and sewer lines had been installed in 1968, while the buildingcodes regulating septic tanks were not enacted until 1970. The courtheld that the later code would regulate future installations and did

74. Mease v. Fox, 200 N.W.2d 791, 796 (Iowa 1972).75. 200 N.W.2d 791 (Iowa 1972).76. See id. at 796-97. In discussing the measure of damages, the court stated:Where there has been a material breach of implied warranty, tenant's dam-ages shall be measured by the difference between the fair rental value of thepremises if they had been as warranted and the fair rental value of the prem-ises as they were during occupancy by the tenant in the unsafe or unsanitarycondition.

Id. at 797.77. Id. at 796-97.78. 267 N.W.2d 63 (Iowa 1978).79. Id. at 68. The court stated: "The warranty arises by operation of law upon

proof of the lease." Id.80. Id. at 65.81. Id. at 68.82. Id.

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not purport to require modifications of existing systems. 83

In 1973, the Minnesota Supreme Court discussed the impliedwarranty of habitability which arose under the Minnesota statutes.In Fritz v. Warthen,8 4 the court held that a tenant was allowed to usethe implied warranty of habitability as a defense to an unlawful de-tainer action.85 Explaining a tenant's remedies, the court stated:

Three possible alternative remedies are available to enforcethe statutory covenants: (1) The tenant may assert breach ofthe covenants as a defense to the landlord's unlawful de-tainer action for nonpayment of rent; (2) the tenant maycontinue to pay rent and bring his own action to recoverdamages for breach of the covenants by the landlord; and (3)the tenant, after vacating the premises and suspending rentpayments, may raise breach of the covenants as a defense toan action by the landlord for the rent.8 6

The opinion in Fritz spoke only of repair and maintenance problemswhich were in violation of the St. Paul, Minnesota, Housing Code andmentioned that notice of the defects and request for their correctionwere given to the landlord prior to the tenants' withholding $35 ofthe $85 monthly rent. The court held that the "implied covenants ofhabitability and the covenant for payment of rent are mutually de-pendent rather than independent."8 7

A recent Minnesota case, Meyer v. Parkin,88 kept a remnant ofthe landlord tort immunity doctrine by holding the landlord respon-sible only for known defects.8 9 In this case, the tenants' daughtersuffered permanent injury from formaldehyde exposure. The plain-tiff-tenants attempted to use a Minnesota statute as a basis for theirclaim for a contractual remedy for breach of the covenant of fit-ness.90 The tenants maintained that the statute eliminated the scien-ter requirements, even for hidden defects. Approving the lowercourt's decision, the court stated that "under section 504.18, landlordsare not strictly liable for conditions they may well be unable to moni-tor."9 1 As such, the landlord was held not be to an insurer under anabsolute liability theory, because he did not know, nor would reason-able diligence have revealed, the formaldehyde's presence.

Also, the Meyer court recognized the lack of any notification re-

83. Id.84. 298 Minn. 54, 213 N.W.2d 339 (1973).85. Id. at -, 213 N.W.2d at 342.86. Id. at -, 213 N.W.2d at 341.87. Id.88. 350 N.W.2d 435 (Minn. Ct. App. 1984).89. Id. at 438.90. Id. at 436 (citing MINN STAT. ANN. 504.18, subd. 1(a) (West Supp. 1986).91. Id. at 436.

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quirement in the statute. The court interpreted the legislative si-lence as evidencing an intent to maintain the element of scienter andnot as an intention to make the landlord an insurer of the premises.9 2

The court noted that the statutes "do not appear to extend liability ofa landlord to money damages for injuries received by a tenant as aresult of an unknown defect in the rented premises. '93

Although Nebraska has adopted the implied warranty of habita-bility through the legislative enactment of the Uniform ResidentialLandlord and Tenant Act, there are no reported cases construing thestatute.

94

Case law in North Dakota on the implied warranty of habitabil-ity is notably lacking also. There is one case, Powers v. Martinson,95

which briefly discusses the implied warranty with respect to the saleof an apartment building. 96 In the Powers case, the defendant-vendorappealed an adverse judgment, alleging that the trial court erred ininstructing the jury on the law of implied warranties. The North Da-kota Supreme Court did not rule on this issue but, instead, statedthat it had no opinion as to whether the law of implied warranties, inrelation to the sale of real estate in North Dakota, applied to buildingcode violations or problems such as water seepage in walls orceilings.

97

As of yet, there is no case law in South Dakota construing thestate's statute regarding the implied warranty of habitability for resi-dential leases.

Thus, each of the Eighth Circuit states, with the exception of Ar-kansas, has provided some form of landlord-tenant law that can beseen to embody an implied warranty of habitability as to residentialrental property.98 Missouri, through its case law, and the otherstates, through their statutes, have protected tenants through the de-lineation of landlord responsibilities. These responsibilities includethe maintaining of premises in a fit and habitable condition so thatthey will not substantially affect health or safety. These states also

92. See id. at 439.93. Id. at 438.94. The Nebraska Supreme Court has discussed the implied warranty of habita-

bility as to new home purchases. See Gitschel v. Sauer, 212 Neb. 454, 457, 323 N.W.2d93, 95 (1982) (quoting Menking v. Larson, 112 Neb. 479, 484, 199 N.W. 823, 825 (1924)).Both of these cases upheld contracts that had provided that the new home buyer wasrelying on his own inspection and not on a warranty. These contract provisions, how-ever, cannot serve to eliminate actions for fraud. Gitschel, 212 Neb. at 457, 323 N.W.2dat 95; Menking, 112 Neb. at 484. 199 N.W. at 825.

95. 313 N.W.2d 720 (N.D. 1981).96. Id. at 724.97. Id. at 724-25.98. See notes 35, 44 and accompanying text supra.

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have mandated the provision of various services and utilities such asheat, electricity, and running water. The states further have outlinedtenant responsibilities such as the requirement to use services andutilities reasonably and to refrain from damaging the landlord's prop-erty. Most of these states have also prohibited the tenant from waiv-ing his rights under this implied warrant of habitability, althoughsome have provided for the landlord and tenant mutually to agreethat the tenant will perform specified repairs in lieu of rent.99

4. Some Unresolved Questions

The adoption of the implied warranty of habitability by the Mis-souri Supreme Court was a sweeping and far-reaching decision.There are at least two issues, however, which were not completelyresolved and which have been the source of question and discussionboth in academic circles and in other jurisdictions. They are: (1) howis the habitability standard to be determined; and (2) can the land-lord and tenant agree to waive the implied warranty of habitability.The second question has two subparts. The first is whether the land-lord and tenant can agree to lease premises on an "as is" basis at theinception of the lease, and the second is whether the tenant canwaive the warranty of habitability during the term of the lease.

5. The Definition of Habitability

Missouri and the other Eighth Circuit states have partially ad-dressed the issue of defining the term "habitability.' 0 0 The Detlingcourt stated that, when determining whether the warranty has beenbreached, "[h]abitability is to be measured by community standards,reflected in most cases in local housing and property maintenancecodes." 10 1 This reference to housing codes raises two additional ques-tions: (1) can an implied warranty of habitability exist in situationswhere there are no applicable housing, building, or fire preventioncodes, and (2) if so, by what standards is it measured.

In Detling, the Missouri Supreme Court, through a proceduralruling, apparently concluded that the implied warranty exists inde-pendently of local codes.10 2 The landlord alleged that the tenants

99. See notes 43-58 and accompanying text supra.100. See notes 38, 49-58 and accompanying text supra.101. Detling v. Edelbrock, 671 S.W.2d, 265, 270 (Mo. 1984).102. Outside the Eighth Cirucit, the Illinois Supreme Court has extended the war-

ranty to areas without housing or building codes. See Glasoe v. Trinkle, 107 Ill. 2d 1,-, 479 N.E.2d 915, 918 (1985). In a suit for nonpayment of rent which also involved acounterclaim for damages resulting from an inoperable furnace the court noted:

[It] would be illogical and inconsistent to require the existence of housing orbuilding codes in cases involving leases of residential property but not in cases

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had not properly pleaded the provisions of the Kansas City PropertyMaintenance Code and the Fire Prevention Code on which they re-lied because they did not plead the terms nor the substance of theordinances. 10 3 In holding for the tenants on this issue, the courtnoted the traditional need to plead an ordinance when the claim as-serted arises from the ordinance. The court, however, concluded thatin the instant case, the ordinances were used only as evidence of thecommunity's standard of habitability, and, as such, they "need not bepleaded with specificity."' 01 4 In the Missouri Supreme Court's view,local codes are not the source of the implied warranty but simplyserve as evidence of the standard by which the community measuresthe warranty.' 0 5 As such the implied warranty exists independentlyof local housing or building codes.'0 6

All of the Eighth Circuit states, with the exception of Arkan-sas,10 7 have devised some form of tacit definition of habitability forresidential leases. This definition is not a dictionary definition but,rather, is a general framework within which habitability can be dis-cussed. Most often the legislature and the courts of these respectivestates have made the local building and maintenance codes the guide-lines in establishing whether there has been a breach of the impliedwarranty of habitability.'0 8 When no local building and maintenancecodes were available, one court established the standard that "the de-fect must be of such a substantial nature as to render the premisesunsafe or unsanitary, and thus unfit for occupancy."' 0 9 In Detling,

involving the sale of new homes by builder-vendors. Both renters and pur-chasers of new homes have a right to expect that their respective rental unitor home will be reasonably suited for ... habitation.

Id. at -, 479 N.E.2d at 919. Noting that habitability standards, "being measured bycommunity standards," may vary, the court indicated that other courts have consid-ered a number of factors including the nature, duration and effect of the deficiency,the age and location of the building, the rent charged, and whether actions of the ten-ant constituted abnormal or unusual use of the building or waiver of the warranty. Id.at -, 479 N.E.2d at 919-20.

103. Id. at 270-71.104. Id.105. Id. at 271.106. See id. at 270. The court expressed: "Habitability is to be measured by com-

munity standards, reflected in most cases in local housing and property maintenancecodes." Id. (emphasis added).

107. Id.108. The statutes in Arkansas contain no definition of an implied warranty of hab-

itability for residential leases. While Arkansas courts have not directly ruled on thisissue in residential leases, they have listed types of items covered by the implied war-ranty of habitability for new homes. These include all parts and systems of a homewhich are tied to design, workmenship, or installation. See note 68 supra. The courts,however, have not delineated what standard to use in determining whether there hasbeen a breach of the warranty.

109. See IOWA CODE § 562A.15(1)(a) (1985); MINN. STAT. ANN. § 504.18, subd. 1(c)

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the court used the phrase "community standards."1 1 0 What that termmeans, in the absence of local codes or state statutes, is anyone'sguess. The phenomenon of neighborhood rehabilitation and its adop-tion of standards that are higher than the minimum housing code re-quirements may put the question in perspective. For example, amunicipality approves a redevelopment plan for a blighted or sub-standard neighborhood which contemplates either restoring the gran-deur of bygone days or transforming the neighborhood into a piece ofsuburbia. The approved redevelopment plan requires all existing res-idential units in the neighborhood to meet the standards of qualitywhich may be normal for the type of community contemplated in theredevelopment plan, but which are considerably beyond the require-ments of traditional housing and building codes. Would a landlordwho maintains property at a minimum housing code level, but fails tomeet the higher standards of the redevelopment plan, be subject tolitigation by the tenants for breach of an implied warranty ofhabitability?

The approach taken most often by the courts and the legislaturesis to focus on health and safety standards.1 The term "habitability"is thus defined as a dwelling unit that poses no threat to the healthand safety of the occupants. The implied warranty of habitability,however, is not extended to conditions which merely affect the aes-thetic qualities of the leased premises.112 Thus, the above-describedlandlord would not appear to be subject to suit.

The Eighth Circuit states, again with the exception of Arkansas,also enumerate various services and facilities that a landlord im-pliedly covenants to provide when leasing residential property. Fiveof these states identify, through legislation, specific responsibilities ofthe landlord."13 The Missouri Supreme Court, in Detling, did notprovide the same degree of specificity, but it ruled that the landlordhas an obligation to provide facilities and services "vital ... to the useof the premises for residential purposes.' 1 14 A representative sample

(West Supp. 1986); NEB. REV. STAT. § 76-1419(1)(a) (Reissue 1981); N.D. CENT. CODE§ 47-16-13.1(1)(a) (1978); S.D. CODIFIED LAWS ANN. § 43-32-8 (1983).

110. Glasoe, 107 Ill. 2d at -, 479 N.E.2d at 920 (citations omitted). The court ad-ded: "[Niot every defect or inconvenience will be deemed to constitute a breach of thecovenant of habitability. The condition complained of must be such as to truly renderthe premises uninhabitable in the eyes of a reasonable person." Id. (citations omitted).

111. Detling, 671 S.W.2d at 270.112. IOWA CODE § 562A.15(1)(a) (1985); MINN. STAT. ANN. § 504.18, subd. 1(c) (West

Supp. 1986); NEB. REV. STAT. § 76-1419(1)(c) (Reissue 1981); N.D. CENT. CODE § 47-16-13.1(1)(a) (1978); S.D. CODIFIED LAWS ANN. § 43-32-8 (1983).

113. Detling, 671 S.W.2d at 270.114. IOWA CODE § 562A.12-.15 (1985); MINN. STAT. ANN. § 504.18 (Reissue 1981);

NEB. REV. STAT. §§ 76-1418 to -1419 (Reissue 1981); N.D. CENT. CODE § 47-16-08, -13.1(1978); S.D. CODIFIED LAWS ANN. § 43-32-6, -8 (1983).

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of the services enumerated, or included by Missouri through implica-tion, are: electrical services, heating, running water, and sanitationfacilities. None of the states, however, have attempted to define, forinstance, how much heat is adequate heat. A rule of reason shouldbe applied to such questions, with the most logical measurement be-ing community standards. That approach, however, leads us to theabove-mentioned problem of defining community standards. Do weuse the housing code or the redevelopment plan? What if they con-flict?115 If there are no codes or plans, who decides what the commu-nity standards are? The landlord? The tenant? The judge?116

6. Waivability

Of the Eighth Circuit states, only Missouri and Arkansas havenot directly addressed the question of waivability. The other states,as mentioned above, 117 have addressed the issue of waivabilitythrough their statutes, although none of them have directly ad-dressed the question of whether a landlord and tenant may agree tolease premises on an "as is" basis. The various statutes do providethat a landlord and tenant may agree under certain circumstances forthe tenant to perform specified repairs in lieu of rent." 8 These stat-utes also state generally that the landlord and tenant may not agreeto waive any of the provisions of the statutes.119 This leads to theconclusion that the landlord and tenant can agree to lease premiseswhich are not totally perfect, but that any attempt to lease premiseswhich posed serious health or safety hazards will be contrary to pub-lic policy.

In Missouri and Arkansas, there is nothing other than a genera-lized, public policy position upon which to base this conclusion. Theother Eighth Circuit states, however, do not appear to permit thistype of waiver of the implied warranty at the inception of the

115. Detling, 671 S.W.2d at 270 (quoting King v. Moorehead, 495 S.W.2d 65, 75 (Mo.Ct. App. 1973)).

116. What if a redevelopment plan requires energy-efficient air conditioning sys-tems and air-tight windows and doors to conserve energy? Would failure to installsuch systems breach an implied warranty under the Detling test? What if we learnthat air-tight houses cause serious air pollution problems? See, e.g., St. Louis Post/Dis-patch, May 3, 1985, at IF, col. 1.

117. Some judges have attempted a "gut feeling" approach to the measure of dam-ages question in implied warranty of habitability cases. See Academy Spires, Inc. v.Brown, 111 N.J. Super. 477, 487-88, 268 A.2d 556, 561-62 (1970) (quoting Story Parch-ment Co. v. Paterson Parchmont Paper Co., 282 U.S. 555, 563 (1931)). Would that workfor deciding whether the warranty was breached? Was that what the Illinois court didwhen it concluded that there was no implied warranty of habitability without a code?

118. See note 63-64 and accompanying text supra.119. See note 65-67 and accompanying text supra.

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lease.120 Only North Dakota may have implied, through case law,that a waiver of the implied warranty of habitability is permissible.121

The question of waiving the implied warranty of habitability dur-ing the term of the lease is less clear. Although Iowa, Minnesota, Ne-braska, North Dakota and South Dakota have forbidden exculpatoryclauses which limit a landlord's liability,122 they have permittedagreements for the tenant to make certain repairs.123 Given the stat-utory language, however, it does not appear likely that the courtswould permit the premises to fall below genuine safety standards.124

Thus, while a landlord may have a contractual cause of action againstthe tenant for failure to perform agreed upon repairs, courts in thesestates would probably hold the landlord ultimately responsible forthe condition of the premises.

As noted above, Arkansas and Missouri have not yet squarely ad-dressed this issue. Under the same public policy considerations, itseems unlikely that courts in these two states will permit any waiverof the implied warranty of habitability during the term of the leasethat might result in such disrepair as to pose genuine health andsafety hazards to the tenants or the general public.125

III. NONADVERSARIAL DISPUTE RESOLUTION

A parallel development of potential significance to landlords andtenants has been the increased attention given to non-adversarialmethods of resolving disputes. A wide range of techniques are beingtouted, with arbitration and mediation the most popular. 26 The ba-sic distinction between arbitration and mediation is the role assumedby the person to whom the dispute has been brought and the amount

120. See note 63-64 and accompanying text supra.121. IOWA CODE § 562A.11(1)(a) (1985); MINN. STAT. ANN. § 504.18, subd. 1 (West

Supp. 1985); NEB. REV. STAT. 76-1415 (Reissue 1981); N.D. CENT. CODE § 47-16-13.3(1-2)(1983); S.D. CODIFIED LAWS ANN. § 43-32-8 (1978).

122. Powers v. Martinson, 313 N.W.2d 720, 724-25 (N.D. 1981). This implication istenative as the court in Powers refused to state whether the law of implied warrantyapplied to that case. Id.

123. IOWA CODE § 562A.11(1)(d) (1985); MINN. STAT. ANN. § 504.18, subd. 1 (WestSupp. 1985); NEB. REV. STAT. § 76-1415 (Reissue 1981); N.D. CENT. CODE § 47-16-13.3(1)-(2) (1983); S.D. CODIFIED LAWS ANN. § 43-32-8 (1978).

124. IOWA CODE § 562A.15(2)-(4) (1985); MINN. STAT. ANN. § 504.18, subd. 2 (WestSupp. 1985); NEB. REV. STAT. § 76-1419(2)-(3) (Reissue 1981); N.D. CENT. CODE § 47-16-13.1(4)-(5) (1983); S.D. CODIFIED LAWS ANN. § 43-32-8 (1978).

125. See Academy Spires, 111 N.J. Super. at -, 268 A.2d at 559. Some examples ofsafety and health problems that the courts would not be willing to permit would besuch things as dangerous stairways, accumulations of garbage which would attract ratsand insects, and falling ceilings (not merely cracked plaster). Id.

126. See notes 38-40, 68, 73 and accompanying text supra.

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of pressure which that person can bring to bear on the parties to thedispute.

Under an arbitration system, the parties usually transfer controlover the dispute to a neutral arbitrator who will impose a resolutionwhich will bind the parties if they have agreed in advance to bebound. Arbitration resembles adjudication in this respect, but it isconducted in a far less formal manner. If the parties have agreed inadvance to accept the arbitrator's decision, courts will enforce thatdecision unless the arbitrator clearly exceeded his authority.

Mediation, on the other hand, focuses primarily on the partiesthemselves coming to an agreement. In these situations, the media-tor acts only as a facilitator without the authority to impose a deci-sion on the parties. The mediator seeks to be accepted by the partiesas a neutral conciliator rather than a partisan participant oradjudicator.

127

Proponents of both mediation and arbitration emphasize thespeed, lack of expense, informality, de-emphasis of adversary rela-tionships, voluntary nature, privacy, and potential expertise of thedispute resolution officials as factors favoring the use of alternativesto litigation.128 They, however, caution that mediation typicallypresumes the possibility of compromise between the parties. If oneof the parties is considerably more powerful than the other, thatparty may not have sufficient incentives to compromise. 129

In addition to the benefits noted, proponents argue that more ex-tensive use of mediation and arbitration would alleviate some of theproblems arising from use of the traditional judicial system. Thecourts are often a hostile environment for landlord-tenant disputes.This hostility can flow from such things as overburdened caseloads,the built-in conflict between human and property rights, traditionalcourt procedures, lack of familiarity with conditions of housing in-volved, and even the lack of standards for determining such things asdamages from a breach of the implied warranty of habitability.130

Some courts, recognizing these difficulties, have begun encouragingparties to participate in a mediation process before the court enters

127. Some examples are binding arbitration wherein the arbitrator is given author-ity by the parties to impose a settlement on the parties if they cannot reach an agree-ment. Some mediation processes also require the parties to commit to writing anyagreement they might reach. Some of these procedures include having the agreementsigned and notarized to give the parties a greater sense of formality.

128. Riskin, Mediation and Lawyers, 43 OHIO ST. L.J. 28, 30 (1982).129. Riskin, Mediation in the Law Schools, 34 J. LEGAL EDUc. 259, 259 (1984);

Sander, Varieties of Dispute Processing, 70 F.R.D. 111, 112-17 (1976); Comment, Arbi-tration of Landlord-Tenant Disputes, 27 AM. U.L. REV. 407, 408 (1978).

130. McGillis, Neighborhood Justice Centers and the Mediation of Housing-RelatedDisputes, 17 URB. L. ANN. 245, 267 (1979).

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its final judgment.131

Landlord-tenant disputes - especially conflicts between individ-ual tenants and their landlords over conditions within their particu-lar apartments because of which rent payments or security depositsare held hostage, while emotions rage out of control - may be partic-ularly suited to nonadjudicatory, dispute-resolution processes.132 Indealing with these issues, property law in general, and landlord-ten-ant law in particular, have traditionally recognized few legal theoriesthat permit courts to compromise claims. Thus, litigation takes theform of an "either/or, winner/loser" process.133 Because of the con-tinuing nature of the relationship and the often blurred facts as towho bears responsibility for the damages, litigation may be the leastsatisfactory approach toward resolving the typical landlord-tenantdispute.

In part, this ineffectiveness is due to the subject matter of thedispute. When parties are in litigation over possessory or ownershiprights to real property, usually one side must be declared the winner,with the corresponding right to possess or exclude, and the other, theloser. Ownership and possessory interests and corresponding respon-sibilities for maintenance and protection of those interests generallymust be clear and undiluted in order to enhance the property's pro-ductivity and transferability. The long-term nature of most propertyinvestments makes predictability an essential element of propertylaw.

The "either/or" choices that prevail in property law litigationcan destroy the continuity that is an essential attribute of landlord-tenant relationships. The modern residential landlord-tenant rela-tionship resembles a family in one crucial aspect - mutual interde-pendence. Because the landlord normally does not live in thebuilding that is being rented, and may, in fact, not even be present inthe same jurisdiction, the landlord depends upon the tenants to be"good" tenants and to take care of the landlord's property. At thesame time, the tenants depend upon the landlord to be a "good" land-lord and to provide the essential services which enable the tenants tolive in peace and dignity. The reality of these mutual but often un-stated interests was recognized in the pathbreaking, implied-war-

131. Fusco, supra note 1, at 338.132. Interview with Ms. Peggy Krash, Director, Neighborhood Dispute Center of

Metropolitan St. Louis, in St. Louis (April -, 1985).133. McGillis, supra note 134, at 267. At least one neighborhood dispute center has

limited the types of disputes that it will consider. The San Francisco CommunityBoard Project has excluded discussion of such general things as problems with com-mon areas or rent increases. The board now focuses only on those issues which areparticular to individual tenants such as specific repairs or the condition of individualapartments. Id. at 268.

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ranty-of-habitability cases.13 4 The nature of mediation, with itsemphasis on direct communication between the parties to the rela-tionship, assists in defining such interests.

These mutual interests often stem from the purely interpersonaldisputes which arise among parties involved in an ongoing relation-ship. 1 35 For example, a landlord might believe that a tenant's youngchildren will be likely to damage the common areas of the premisesand, therefore, will be less tolerant of any normal childlike activity.The tenant, on the other hand, might believe that the landlord hasfailed to provide an adequate area where the children may play with-out them worrying about damage to the premises. In this situation,mediation can be of immeasurable help because it can get the partiestalking to one another. With this conversation, the parties may real-ize that there is no genuine conflict between them. Meshing the con-cept of "kids will be kids" with the landlord's legitimate concern forthe preservation of his property is just one circumstance which is bet-ter suited for dispute resolution through communication rather thanthrough a formal judicial process.

Satisfactory protection of the mutual interests of landlords andtenants requires a stable, predictable relationship in which each partycan rely on the other to perform in accordance with the mutual un-derstandings. It, however, does not require that landlords or tenantssubordinate their self-interests. In fact, responding to the others'concerns actually maximizes the responders' self-interests. The land-lord who wants the tenants to be "good" tenants and to take care ofthe property, as well as to pay the rent on time, is more likely to getthese results if he delivers the services that his tenants justifiably ex-pect to receive. Conversely, the tenant who seeks services of a partic-ular quality, such as prompt responses to repair and maintenancerequests, is more likely to obtain such responses if he pays the renton time and takes reasonable care of the premises. In short, bothparties desire that the other be "good.' 1 36

Unfortunately, as is the case with all families, disputes often mar

134. Until recently, landlords were protected by the landlord tort immunity doc-trine from liability for injuries resulting from unsafe premises to tenants or theirguests. This doctrine has been modified somewhat to permit recovery for injuriescaused by latent defects in the premises of which the landlord knew. This immunity,however, does not extend indefinitely, nor does it necessarily extend to third personswho are outside the premises. Additionally, there is no comparative negligence con-cept, or contributory negligence theory. See generally Davis, A Fresh Look at PremisesLiability as Affected by the Warranty of Habitability, 59 WASH. L. REV. 141 (1984).

135. See Javins v. First Nat'l Realty Corp., 428 F.2d 1071, 1075 (D.C. Cir. 1970);Green v. Superior Court, 10 Cal. 3d 616, 620, 517 P.2d 1168, 1170, 111 Cal. Rptr. 704, 706(1974).

136. Cooke, Mediation: A Boom or a Bust?, 28 N.Y.L. SCH. L. REV. 3, 10 (1983).

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the day-to-day life of the landlord-tenant family. Comparable toother families, resorting to the courts for a resolution of a landlord-tenant dispute generally prestages the destruction of the relationship.Whatever possibilities for conciliation and compromise which mightexist and which could save the relationship are generally lost oncelitigation is commenced. This loss is due to the way an adversarialproceeding often transforms a dispute over competing interests into aconflict over hardened positions.137 Regardless of who wins a land-lord-tenant lawsuit, whatever trust and respect that might have beenpresent at one time and which is so essential to the achievement of a"good" landlord-tenant relationship, has probably been destroyed bythe bitterness engendered in the litigation. Litigation can be quitecostly to both the winner and the loser. If the tenant leaves as a re-sult of the conflict, the landlord faces the additional expense and un-certainty of a vacant apartment until a new tenant can be found, plusthe cost of redecorating or repairing the apartment to attract a newtenant. Likewise, the departing tenant faces the cost and uncertaintyof seeking a new place to live. If the tenant stays after the litigationhas been completed, the obstacles that must be overcome before a"good" relationship can be restored are enormous.

The seeds of urban tragedy can be found in this state of affairs.The great hope that the revolution in residential landlord-tenant lawwould result in improved housing conditions for low-income familieshas dissolved like a desert mirage.138 Wholesale abandonment ofapartment buildings or their conversion into condominiums has oc-curred in many urban neighborhoods. 139 Of course, placing all of thehousing ills of the urban poor on the doorstep of the landlord-tenantcourthouse is about as fair as blaming all of the ills of society on thefailure of the public school system. However, the fact remains thatreliance on litigation, even after the substantial shift in the law to-ward the tenant's point of view, has not resulted in a measurable im-provement in the living conditions of the low- or moderate-incomeurban tenant. Continued reliance on litigation as the basic mecha-

137. See notes 49-62 and accompanying text supra. The statutes of the variousstates allocate various responsibilities between the landlord and the tenant. Generally,the statutes just speak in terms of the landlord's providing services and utilities, whilethey generally require the tenant simply to use the services and utilities in a reason-able manner. The statutes also provide that the tenant shall not damage the premises.Some statutes simply state that the landlord will not be responsible for damage result-ing from the activities of the tenant, his family, or invitees.

138. See R. FISHER & W. URY, GETTING TO YES: NEGOTIATION WITHOUT GIVING IN

(1981).139. Blanchard, Mediation of Disputes, -, (1984) (unpublished student paper)

(available at St. Louis University Law School Library); Meehan, Map in the Middle, -, (1984) (unpublished student paper) (available at St. Louis University Law SchoolLibrary).

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nism for resolution of landlord-tenant disputes is, thus, open to seri-ous question.

140

The shift in landlord-tenant law has laid the foundation for theuse of alternatives to litigation in dispute resolution. Two of the ma-jor concerns that have been raised about the use of arbitration andmediation in landlord-tenant disputes are: (1) the perceived imbal-ance of power between the landlord and the tenant; and (2) the cor-responding lack of incentive for the landlord to participate innoncoercive dispute resolution proceedings. Under the common law,the landlord certainly held the upper hand, in that the tenant had anabsolute obligation to pay rent and usually had all the responsibilityfor maintenance and repair, even if he did not have control or thewherewithal to discharge that responsibility. The typical response ofthe landlord to a tenant's protest of that state of affairs was that noone was forcing the tenant to stay.141 This has changed. Society,through the courts and the legislatures, has shifted much of the re-pair and maintenance responsibility back to the landlord.1 42 In theeyes of the law, a state of equilibrium has been approached. If any-one may cry in the future that the system is out of balance, it may bethe landlords.

14 3

While these changes in the law are not yet reflected in the reali-ties of the landlord-tenant courts, they can dispel the power-imbal-ance concern because the tenant today has a wide range of legalweapons at his disposal.14 4 Effective dissemination of information

140. Blanchard, supra note 144 at ; Meehan, supra note 144 at -.141. See Bok, A Flawed System of Law Practice and Training, 33 J. LEGAL EDUC.

570, 580 (1983).142. See Hicks, supra note 15, at 514-27. For example, if a tenant abandons the

premises before the expiration of the lease, he remains liable for rent as it accrues. Ifthe landlord re-lets the premises, however, the courts will assume that the re-letting isfor the landlord's benefit unless he notifies the abandoning tenant that it is for thebenefit of the tenant. With the increasing application of contract theory to landlord-tenant situations, it appears that a landlord now will be required to mitigate his dam-ages. The issue, however, remains unanswered whether a landlord can incorporate anacceleration clause in the lease to eliminate this duty to mitigate damages. Id.

143. See Donahue, Change in the American Law of Landlord and Tenant, 37 MOD.L. REV. 242, 247-63 (1974).

144. For an analysis of the changes in the landlord tort immunity doctrine, see Da-vis, supra note 138 at 155. The author had an interesting experience in a first-yearproperty class. As an introduction to the use of arbitration and mediation in landlord,tenant, and a "neutral third party." During the first exercise, the neutral adjudicateda dispute through arbitration. Immediately thereafter, the students engaged in a medi-ation of the same dispute, which the neutral now playing the role of the mediator, atthe end of both exercises, students were asked for their reactions to the experience.Two "student landlords" reported feeling more comfortable before the mediator be-cause of the possibility that a settlement might be obtained. They felt that they wouldhave lost their case before the arbitrator because of the application of the implied war-ranty of habitability doctrine. The exercise was patterned after classroom techniquesdescribed in Riskin, Instructor's Manual for Mediation, Law and Lawyers 47-53 (1985)

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about the powershifts in the landlord-tenant law may help tenantsovercome the intimidation results from their sense of powerlessness,while also giving landlords a greater incentive to accept and, perhaps,even to seek out nonadversarial means of settling disputes. If a seek-ing of nonadversarial means were to occur, the use of the techniquesof conciliation and compromise, heart of the mediation process, couldenable the disputing parties to preserve the essential unity of thelandlord-tenant relationship, while resolving their differences in areasonably efficient and less costly manner. One of the most positiveresults that could come about is an increase in direct communicationregarding the disputed matter. Communication between the affectedparties could occur at an earlier stage so as to prevent irreparabledamage to the landlord-tenant relationship. 145

Signs that this incentive to mediate is developing have been no-ticed in the early days of the Neighborhood Dispute Center of Metro-politan St. Louis ("Center"). The Center is a not-for-profitorganization "designed to give people involved in conflict an opportu-nity to resolve their differences without court action.' 46 Its initialsponsors were the Bar Association of Metropolitan St. Louis, the St.Louis University School of Law, and the ABA Special Committee onHousing and Urban Development Law. With the assistance of seed-money grants from the Missouri Housing Development Commissionand the ABA Young Lawyers' Section, as well as office space donatedby the Missouri-Illinois chapter of the Salvation Army, the Centeropened its doors to the public on February 15, 1985. Thirty-fivetrained volunteers, including ten law students, are available to medi-ate housing-related disputes.

While it is far too early to draw even tentative conclusions, oneof the most interesting developments is the apparent willingness ofsome landlords to cooperate and even to seek out the services of the

(unpublished material) (available from the Center for the Study of Dispute Resolu-tion, University of Missouri - Columbia School of Law).

145. Examples include the implied warranty of habitability, the prohibition of re-taliatory eviction, statutory regulation of security deposits, and the growing demise ofthe tort immunity doctrine. It is interesting to note, however, that at least one court islimiting landlord tort immunity in the area of building security. In Feld v. Merriam,336 Pa. 243, 485 A.2d 742 (1984), the court held that a landlord is not required to pro-vide security protection in common areas but that he may be held liable when securityservices are provided and are negligently performed or exercised. Id. at -, 485 A.2d at745.

146. See Cooke, supra note 140, at 19. Two members of the St. Louis judiciary areclosely involved with the Neighborhood Dispute Center of Metropolitan St. Louis, anot-for-profit corporation that offers mediation for resolving housing related disputes.In conversations with the author, they have expressed their concerns over the lack ofongoing communication between landlords and tenants. One of the greatest aids toparties in mediation is the continued involvement of the parties in the negotiation-and-settlement process.

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Center. 147 Of the first three landlord-tenant cases which were fullymediated by the Center, two were initiated by landlords. In the firstsix weeks of the program, the parties to six cases, which were alreadyin court, were encouraged by the judge to participate in a negotiationprocess. Five of these six were resolved through mediation. Each ofthese cases involved tenant complaints about repairs. Three of themwere resolved by the landlord's agreeing to accept repairs by the ten-ants in lieu of rent. Two of the cases resulted in the landlord's agree-ing to complete repairs as to hot and cold running water, floors,ceilings, and a roof. The only unresolved case involved a factual is-sue: the landlord wanted the tenant to pay for the repair of a hole inthe ceiling, while the tenant maintained that the hole was alreadythere when he moved into the premises. 148

While neither participating landlords nor mediators report thatknowledge of the implied warranty of habitability or other changesin the law was a factor in the landlords' decisions to consent to medi-ation,149 the fact that the law has changed so dramatically establishesa firm foundation on which to test the efficacy of alternatives to liti-gation for resolving these disputes. It is interesting to note, however,that most of the cases which were favorably resolved involved land-lords of relatively small apartment complexes. Larger landlords em-ploying management firms have tended to refuse to participate in themediation process offered by the Center.150 The cases handled by the

147. Informational Brochure, Neighborhood Dispute Center of Metropolitan St.Louis -(1985).

148. The Neighborhood Dispute Center in St. Louis is designed, as its name im-plies, to encompass general neighborhood disputes. During the first year of operation,438 calls were received by the Center. Of these calls, 75.6% were landlord-tenant re-lated. Of these calls, 84% were initiated by tenants, and 16% were initiated by land-lords. Of the tenant-initiated calls, 41% specifically referred to the issues of eitherrepairs or utilities. The other 59% concerned questions of eviction, rent, security de-posits, leases, and tenants' property held by the landlord. It is at least probable that agood portion of these questions involved an underlying issue of either repairs or utili-ties. Virtually all of the landlord-initiated calls concerned the questions of evictionand rent collection. Again, it is likely that, in some of these cases, there was an under-lying repair-utility issue which was unresolved between the landlord and tenant.

Approximately 100 calls were from persons simply seeking information. Another43 callers were referred to appropriate agencies, and 30 callers did not continue afterthe initial call. In 100 cases, one of the parties refused to accept mediation, with 72%of these being the party against whom the complaint was made. The parties resolved85 cases prior to mediation, and 63 cases actually were mediated. Of the 63 mediatedcases, 43 were referred to the Center by the judges in St. Louis under a practice ofoffering mediation before the disposition of cases in small claims court and on theLandlord-Tenant Docket of the associate circuit court when both parties are not repre-sented by attorneys.

149. Interview with Ms. Peggy Krash, Director of the Neighborhood DisputeCenter of Metropolitan St. Louis (April -, 1985).

150. Interview with Ms. Peggy Krash, Director of the Neighborhood DisputeCenter of Methropolitan St. Louis (Mar. -, 1985).

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Center tend to indicate that the implied warranty of habitability willaffect the landlord-tenant relationship only slightly. Since each ofthe cases that were referred to mediation by the courts involved re-pairs, it also appears that judges are becoming aware of mediation asa tool which can be advantageously used in such situations.

Nor should mediation and arbitration be confined solely to dis-putes over conditions in individual apartment units. Mediation tech-niques have also been used with increasing success to resolvecomplex land-use disputes in environmental and hazardous waste-dis-posal conflicts.151 The group dynamics inherent in those types ofconflicts are no less complicated than those involving common-areadisputes between a group of tenants and the building owner. Carefulattention to interests rather than positions, as well as to facts ratherthan to emotions, can lead to mediated solutions of seemingly intrac-table problems, such as the removal of lead-based paint from com-mon hallways or conversion of common utilities to individuallymetered systems. 152

With respect to the question concerning the meaning of the term"habitable" and the waivability of the implied warranty of habitabil-ity, mediation and other nonlitigation techniques may offer greaterprospects for success in resolving typical disputes. On the assumptionthat "habitable" means a dwelling unit that is free from defects thatcause a serious threat to the health or safety of the occupants, societyought not permit individuals to bargain away the warranty and to ac-cept a serious risk of illness or injury except under the most care-fully controlled conditions. 153 However, one suspects that the"typical" landlord-tenant dispute over living conditions does not riseto this level of seriousness, at least not at the beginning of a disputeinvolving conditions that have developed after the tenancy began. Towhat extent is a leaky pipe a health hazard or merely an aggrava-tion? Is a crack in ceiling plaster a threat to personal safety ormerely an eyesore? Does an outdated furnace that heats enough to

151. Id.152. P. Marcus, Creative Conflict Resolution of Land-Use Disputes, Presentation to

the Real Property Division, American Bar Association, Annual Meeting, Chicago, Ill.(Aug. 5, 1984).

153. Mease v. Fox, 200 N.W.2d 791, 796 (Iowa 1972). The tenants were permitted touse the implied warranty of habitability as a defense and counterclaim to a landlord'saction to recover rent. Id. at 798. The tenants had already vacated the premises. Thecourt traced the history of landlord-tenant law from the time of the agrarian MiddleAges. The court ultimately recognized that modern, urban tenants are ill-equipped tomake repairs like the jack-of-all-trade farmer. Id. at 793. The court held that the im-plied warranty of habitability obtains at the inception of the lease and remains in forceduring the term of the lease. Id. at 796. The landlord is to comply with applicablehousing law, ordinance, or regulation, and he must keep the premises safe, sanitary,and fit for living. Id.

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take the chill off but not to provide comfort without the use of sweat-ers make an apartment uninhabitable? Reasonable people may differin their answers to these questions. The published opinions and stat-utory enactments do not produce clear and consistent answers. Thereason may be that "habitability" embraces conditions in which, asJustice Sutherland noted in another context, "the bad fades into thegood."1

54

Certainly, any one of the situations noted above, if left untreated,could ripen into a serious problem in which the standards of habita-bility should not be waived. However, prior to that point, the partiescould, and should, be encouraged to seek a negotiated or mediatedsettlement which might involve the "waiving" or accommodation ofinterests on both sides. Such a result could serve to strengthen a"good" landlord-tenant relationship. The waiver of certain desirablebut unnecessary living conditions could be in return for an accommo-dation on the price of the rent. The issue of nonwaivability of stan-dards of habitability would not have to be faced because the problemwould have been resolved far short of that point.

IV. CONCLUSION

It has been recommended that a certain amount of bargaining bepermitted between landlords and tenants regarding standards of hab-itability which do not materially affect health and safety. This bar-gaining would include the right to waive some of these nonmaterialstandards. Further, it has been recommended that mediation of dis-putes concerning these standards be encouraged as an alternative tolitigation. Mediation, however, will be considered seriously only ifthe parties can come to the negotiation or mediation table with equallegal status.

Prior to the revolution in landlord-tenant law, this bargainingability was not possible, especially for most situations involving low-and moderate-income tenants. The landlord held all the legal cards.Unless the parties agreed to a modification in terms, which almostnever happened, the landlord's obligation was discharged with thetransfer of possession. The tenant took the premises in whatevercondition they might be, and he had virtually all the repair and main-tenance obligations. The landlord did have an obligation not to inter-fere with the tenant's peaceful possession, but only if the premisesbecame uninhabitable because of the landlord's affirmative actions,could the landlord be held responsible for breach of the implied

154. Village of Euclid v. Ambler Realty Co., 272 U.S. 365, 389 (1926) (discussing theprocess of determining the validity of laws).

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promise supporting that obligation.155 The only remedy left to thetenant was vacation of the premises, a source of little consolation tothe typical low- or moderate-income urban tenant because of thescarcity of decent housing.156 The scales of justice were tipped decid-edly in favor of the landlord.

This judicial imbalance has now changed. Development of theimplied warranty of habitability theory, including the impendingbreakdown of the landlord tort immunity doctrine, regulation of theuse of security deposits, and statutory protections for low-income ten-ants facing displacement because of condominium conversions, haverepositioned the scales in dramatic fashion. A substantial change inlegal status has occurred, and the parties are now on relatively equallegal footing.'5 7 Rights and responsibilities can be defined moreclearly, but the relationship has become considerably more complexbecause of the recognition of the shared nature of these rights andresponsibilities.1

58

As a result, a major impediment to negotiation and mediationhas been removed. The equality of the parties before the law and theattendant complexity of their relationships have produced a settingin which alternatives to litigation to resolve landlord-tenant disputesoffer important benefits to landlords, tenants, and the generalpublic.'

5 9

What is still missing is recognition of this changed status, partic-ularly by landlords and, to a certain extent, their attorneys.160 As

155. See Paradine v. Jane, 82 Eng. Rep. 897, 897-98 (K.B. 1681). This appears to bethe first recorded case to impose an implied covenant of peaceful enjoyment.

156. Dunham, Vendor's Obligation as to Fitness of Land for a Particular Purpose,37 MINN. L. REV. 108, 110 (1953). See generally Bearman, Caveat Emptor in the Sale ofRealty - Recent Assaults upon the Rule, 14 VAND. L. REV. 541, 542 (1961).

157. See Donahue, supra note 148 at 263.158. Note the parallel lines of responsibilities in the uniform acts, regarding provi-

sion by the landlord of facilities and the concurrent responsibilities of the tenants touse them in a reasonable manner. See UNIF. RESIDENTIAL LANDLORD AND TENANTAcT §§ 2.104, 3.101, 7B U.L.A. 460, 474 (1972).

159. The long-recognized value of negotiation, mediation, and arbitration to theAmerican labor movement and the increasing use of such techniques to resolve dis-putes in the everyday buisiness world offer models that the real estate managementindustry may wish to examine.

160. Ms. Peggy Krash, Director of the Neighborhood Dispute Center of Metropoli-tan St. Louis, in St. Louis (Apr. -, 1985), has noted the general hesitation of landlordsto submit disputes to the mediation process. She has also noted the apparent rigidityof landlord attorneys and the differences in attitudes expressed by courts between un-represented landlords and those with attorneys.

Most of the landlords who consented to mediation during the first year of theCenter's operation were persons who had filed lawsuits against tenants, usually forrent and possession, and were later referred to the Center by the judge assigned totheir cases. In Ms. Krash's opinion, the status of the first party and the "clout" of areferral agency such as a court appear to have significant effects on whether the sec-

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landlords and tenants become more familiar with the changes in thelaw, there is reason to hope that they may become more amenable toand, perhaps, supportive of alternatives to litigation as the preferredapproach to management of the dispute-resolution process. Thecourts can retain their rightful roles as guardians of the basic legalrights of both parties and as sources for the clarification of unsettledquestions of law, but they can be relieved of the burden of managingcountless disputes better resolved by the parties themselves.

ond party agrees to mediate. Interview with Ms. Peggy Krash, Director of the Neigh-borhood Dispute Center of Metropolitan St. Louis (Mar. -, 1986).

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mediation of landlord-tenant disputes: new hope for the

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