Commercial Landlords Beware: Listen to Your Tenant's Complaints About Defects As A Court Has Ruled that You Can Be Liable For Double or Treble Damages

July 12, 2013

In a stern warning to commercial landlords, a Superior Court judge in Kuong, et al. v. Wong, et al., has ruled that a commercial landlord could be held liable for double or treble damages and attorney's fees under G.L. c. 93A, the consumer protection act, for his failure and neglect to remedy complaints of common area defects which were causing damage to leased units.

Defendant K&W Realty ("Landlord") owned a commercial building in Boston's Chinatown. The Landlord owned and operated a restaurant on the second floor of the building, and it rented space to commercial tenants on the first floor.

One of the tenants, Plaintiff Peter Kuong, owned and operated a hair salon. Another Plaintiff and tenant was Kim Pham who operated a dressmaking/seamstress shop in a space that she subleased from Kuong. A third tenant, Plaintiff Mary Nguyen, operated a Vietnamese restaurant on the first floor. Upon leasing the premises, the tenants did the necessary build-outs at their own expense.

On multiple occasions over a ten-year period, each of the Plaintiffs complained to the Landlord about water leaks into their respective spaces. In fact, Plaintiffs collected the water, which often contained other debris and emanated sewer-like and fish-like smells, in buckets that they situated throughout their units. They often had to empty multiple buckets a day. Additionally, the Plaintiffs complained about hearing rats running through the common space over their ceilings, smelling dead rats, and even evidence of the rodents in their units. The Landlord never acted on these complaints.

In April 2009, the ceilings in two of the units collapsed bringing with them rat carcasses, food debris, moldy plaster and other building materials. The city of Boston closed the shops. The Plaintiffs filed a civil action against the Landlord in Superior Court, alleging tort and contract claims. Significantly, the Plaintiffs also brought claims of unfair business practices under Chapter 93A.

The case went to trial and the jury found the Landlord was liable on the contract and tort claims, awarding several hundred thousand dollars in damages. The judge decided the unfair business practices 93A claim herself.

At trial, the Plaintiffs argued that the Landlord's actions constituted "willful" behavior in the context of a business relationship and thus violated G.L. c. 93A and entitled the Plaintiffs to multiple damages. The judge agreed holding:

The documented code violations in this case merely corroborate the pattern of behavior which I find to be unethical, unfair, and unscrupulous, culminating in the abject state of the shop units ... and the undisputed loss to the plaintiffs of their business...I have carefully considered the question of willfulness, and can only rule on this record that the behavior of Wong, and through him, K & W, qualifies as reckless in the extreme.

The judge went on to award the Plaintiffs double damages and attorney's fees.

The judge's decision is a reminder to commercial landlords that tenant's complaints regarding conditions and defects cannot fall on deaf ears. Landlords should be responsive to such complaints. The Kuong case is instructive in showing commercial landlords what can happen when tenant's complaints are ignored.

Contact Attorney Mucci, an experienced landlord tenant attorney, if you have questions about your rights or obligations as to the conditions of leased premises.