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That damages are not susceptible to precise determination does not insulate a landlord from liability. Inasmuch as the duty of a tenant to pay rent is coextensive with the landlord's duty to maintain the premises in habitable condition, the proper measure of damages for breach of the warranty is the difference between the fair market value of the premises if they had been as warranted, as measured by the rent reserved under the lease, and the value of the premises during the period of the breach. The award may take the form of a sum of money awarded the tenant in a plenary action or a percentage reduction of the contracted-for rent as a setoff in summary nonpayment proceeding in which the tenant counterclaims or pleads as a defense breach by the landlord of his duty to maintain the premises in habitable condition.
For 17 days, petitioner rental management company’s entire maintenance and janitorial staff did not report to work due to a strike. As a result of the strike, some of the tenants withheld rent for the period encompassed by the strike. Petitioner commenced a summary nonpayment proceeding, and respondents raised the affirmative defense that, as a result of the strike, petitioner had not provided essential services and had allowed conditions dangerous to the health of tenants to exist on the premises, constituting a breach of its implied warranty of habitability. During the strike, all of the incinerators were wired shut, compelling tenants to dispose of refuse at the curbs. Uncollected trash piled up the height of the first floor windows. Exposure of the accumulated garbage necessitated the declaration of a health emergency by the New York City Department of Health. The Civil Court determined that the conditions at the complex constituted a breach of the implied warranty of habitability and found that the loss in rental value justified a reduction of 10% in the tenants' June rent bill. The Court of Appeals affirmed the order of the Appellate Division. Petitioner appealed.
The Court affirmed the decision, holding that the conditions caused by a 17-day strike by the maintenance and janitorial staff of a seven-building apartment complex, during which incinerators were wired shut, uncollected trash was piled up outside to the height of the first floor windows, a health emergency was declared by the Department of Health, rats, roaches and vermin flourished, and there were numerous violations of housing and sanitation codes, constituted a breach by the landlord of the implied warranty of habitability, which gave rise to an implied promise on the part of the landlord that both the demised premises and the areas within the landlord's control were fit for human occupation at the inception of the tenancy and that they will remain so throughout the lease term. According to the Court, inasmuch as the duty of the tenant to pay rent was coextensive with the landlord's duty to maintain the premises in habitable condition, the proper measure of damages for breach of the warranty was the difference between the fair market value of the premises if they had been as warranted, as measured by the rent reserved under the lease, and the value of the premises during the period of the breach.