Pugh v. Holmes
486 Pa. 272, 405 A.2d 897
Pa., 1979.

LARSEN, Justice.

I. DOCTRINE OF CAVEAT EMPTOR ABOLISHED/IMPLIED WARRANTY OF HABITABILITY ADOPTED

ADOPTED

[1] [2] The doctrine of Caveat emptor comported with the needs of the society in which it developed. However, we find that the doctrine of Caveat emptor has outlived its usefulness and must be abolished, and that, in order to keep in step with the realities of modern day leasing, it is appropriate to adopt an implied warranty of habitability in residential leases. The rule of Caveat emptor, as applied to landlord-tenant relationships, developed in England in the sixteenth century and was adopted in the nineteenth century as the law of this Commonwealth in Moore v. Weber, 71 Pa. 429 (1872). Moore held “The rule here, as in **901 other cases, is Caveat emptor. The lessee's eyes are his bargain. He is *280 bound to examine the premises he rents, and secure himself by covenants to repair.” Id. at 432. In the primarily agrarian society in which the doctrine developed, the law viewed the lease transaction as a conveyance of land for a term, and the focal interest in the conveyance was the land any shelters or structures existing on the land were “incidental” concerns. The rent was viewed as “coming out of the land” itself, not from the dwelling or the dweller. The feudal landlord

Pugh v. Holmes, 384 A.2d at 1237-38.[FN1]

FN1. For judicial analysis of the historical context in which the property view of the landlord-tenant relationship developed, See cases cited in Pugh v. Holmes, 384 A.2d at 1237, n. 2. See also 2 F. Pollock and F. Maitland, The History of English Law 131 (2d ed. 1923); 2 R. Powell, The Law of Real Property s 225(2) (P. Rohan rev. 1975); Restatement (Second) of Property, Landlord and Tenant s 5.1, Reporter's Note 2.

FN2. Alaska Alaska Stat. ss 34.03.100, 34.03.160, 34.03.180 (1974); Arizona Ariz.Rev.Stat.Ann. ss 33-1324 and 33-1361 (1974); California Cal.Civ.Code ss 1941, 1942 (West 1974), and Green v. Superior Court, 10 Cal.3d 616, 111 Cal.Rptr. 704, 517 P.2d 1168 (1974); Connecticut Conn.Gen.Stat.Ann. ss 47-24 Et seq. (1960), and Todd v. May, 6 Conn.Cir.Ct. 731, 316 A.2d 793 (1973); Delaware Del.Code Ann. tit. 25, s 5303 (1974); District of Columbia Javins v. First National Realty Corp., 138 U.S.App.D.C. 369, 380, 428 F.2d 1071, 1082 Cert. denied, 400 U.S. 925, 91 S.Ct. 186, 27 L.Ed.2d 185 (1970); Florida Fla.Stat.Ann. ss 83.51, 83.56 (1973); Georgia Ga.Code Ann. tit. 61, Sections 111-112; Givens v. Gray, 126 Ga.App. 309, 190 S.E.2d 607 (1972); and Stack v. Harris, 111 Ga. 149, 36 S.E. 615 (1906); Hawaii Haw.Rev.Stat. s 521-42 (Supp.1974), and Lemle v. Breeden, 51 Haw. 426, 462 P.2d 470 (1969); Idaho Idaho Code s 6-316 (H.B. No. 34, 1977); Illinois Jack Spring Inc. v. Little, 50 Ill.2d 351, 280 N.E.2d 208 (1972); Indiana Old Town Development Company v. Langford, Ind.App., 349 N.E.2d 744 (1976); Iowa Mease v. Fox, 200 N.W.2d 791 (Iowa 1972); Kansas Steele v. Latimer, 214 Kan. 329, 521 P.2d 304 (1974); Kentucky Ky.Rev.Stat.Ann. ss 383.595, 383.625 (Supp.1974); Maine Me.Rev.Stat.Ann. tit. 14, s 6021 (Supp.1974); Maryland Md.Real Prop.Code Ann. s 8-211 (Cum.Supp.1975), superseded in their respective jurisdictions by Baltimore City Public Local laws ss 9-9, 9-10, 9-14.1 (eff. July 1, 1971), and Montgomery County Code, Fair Landlord-Tenant Relations, ch. 93A (Nov. 21, 1972); Massachusetts Mass.Gen.Laws Ann. ch. 239, s 8A (Supp.1974), and Boston Housing Authority v. Hemingway, 363 Mass. 184, 293 N.E.2d 831 (1973); Michigan Mich.Comp.Laws Ann. s 554.139 (Supp.1974), and Rome v. Walker, 38 Mich.App. 458, 196 N.W.2d 850 (1972); Minnesota Minn.Stat. s 504.18 (1974), Applied in Fritz v. Warthen, 298 Minn. 54, 213 N.W.2d 339 (1973); Missouri King v. Moorehead, 495 S.W.2d 65 (Mo.App.1973); Montana Mont.Rev.Codes s 42-420 (1978); Nebraska Neb.Rev.Stat. ss 76-1419, 76-1425 Et seq. (Cum.Supp.1974); Nevada Nev.Rev.Stat. tit. 10 s 118A.290 (1977) (but note that the Act does Not protect tenants whose landlord owns fewer than seven units); New Hampshire Kline v. Burns, 111 N.H. 87, 276 A.2d 248 (1971); New Jersey Marini v. Ireland; 56 N.J. 130, 265 A.2d 526 (1970); New Mexico N.M.Stat. ss 70-7-1 Et seq.; New York Amanuensis, Ltd. v. Brown, 65 Misc.2d 15, 318 N.Y.S.2d 11 (N.Y.Cir.Ct.1971); N.Y. Real Prop. Law s 235-b (McKinney 1972), As adopted in ch. 597, (1975) N.Y. Acts 875; North Carolina ch. 770, Session Laws, 1977-78 (N.C.G.S., ch. 42, art. V); North Dakota N.D.Cent.Code s 47-16-13.1 Et seq. (1977); Ohio Glyco v. Schultz, 35 Ohio Misc.2d 25, 62 Ohio Op.2d 459, 289 N.E.2d 919 (Mun.Ct.Ohio 1972), and Ohio Rev.Code Ann. ss 5321.04, 5321.07 (Page Supp.1974); Oklahoma Okla.Stat. tit. 41 s 118 (1978); Oregon Or.Rev.Stat. ss 91.770, 91.800-.815 (1974); Rhode Island R.I.Gen.Laws s 34-18-16 (1968); Tennessee Tenn.Code Ann. ss 64-2801 Et seq. (1974); Texas Kamarath v. Bennett, (Tex.1978), 568 S.W.2d 658 (1978); Vermont Vt.Stat.Ann. tit. 12, s 4859 (1972) (remedy limited to affirmative defenses only); Virginia Va.Code Ann. ss 55-248.13, 55-248.25 (Cum.Supp.1975); Washington Wash.Rev.Code Ann. s 59.18.060 (Supp.1974), and Foisy v. Wyman, 83 Wash.2d 22, 515 P.2d 160 (1973); West Virginia H.B. 1368 (passed March 11, 1978; effective date, June 11, 1978) (sets out landlord obligations but does not provide remedy for breach); Wisconsin Pines v. Perssion, 14 Wis.2d 590, 111 N.W.2d 409 (1961); But see Posnanski v. Hood, 46 Wis.2d 172, 174 N.W.2d 528 (1970) and Blackwell v. Del Bosco, Colo., 558 P.2d 563 (1976). Brief for Amicus Curiae, National Housing Law Project, 1-2, n. 1.

Id. at 289-90, 243 A.2d at 398.

[3] [4] Given the foregoing considerations and authority, we affirm the Superior Court's holding that a lease is in the nature of a contract and is to be controlled by principles of contract law. The covenants and warranties in the lease are mutually dependent; the tenant's obligation to pay rent and the landlord's obligation imposed by the implied warranty of habitability to provide and maintain habitable premises are, therefore, dependent and a material breach of one of these obligations will relieve the obligation of the other so long as the breach continues.

*285 II. ADOPTION OF IMPLIED WARRANTY OF HABITABILITY: A PROPER JUDICIAL FUNCTIOn

[5] Appellant does not argue that an implied warranty of habitability does not comport with current understanding of the landlord-tenant relationship. In light of the overwhelming authority in favor of the warrant, he would be hard pressed to do so. Rather, the thrust of appellant's argument is that the establishment of an implied warranty of habitability is the setting of social policy, which is a function of the legislature. Specifically, appellant maintains that, because the legislature has acted in the field via the Rent Withholding Act, Act of January 24, 1966, P.L. 1534, As amended, 35 P.S. s 1700-1 (1977), the courts are prohibited from further development of common law solutions to landlord-tenant/habitability problems. We cannot accept this position.

[6] [7] The Act does not purport to be the exclusive tenant remedy for unsavory housing, nor does it attempt to replace or alter certain limited and already existing tenant remedies such as constructive eviction. Kelly v. Miller, 249 Pa. 314, 94 A. 1055 (1915). The Act's silence as to constructive eviction could not be construed, without more, as a legislative abolition of that doctrine. Neither can mere enactment of the Rent Withholding Act signal a legislative intent to remove from the courts the authority to fashion new remedies where appropriate in the landlord-tenant field.

[8] [9] Caveat emptor was a creature of the common law. Elderkin v. Gastner, supra at 123, 288 A.2d at 774. Courts have a duty “to reappraise old doctrines in the light of the facts and values of contemporary life particularly old common law doctrines which the courts themselves have created and developed.” Javins v. First National Realty Corp., supra 138 U.S.App.D.C. at 372, 373, 428 F.2d, 1074 at 1074, quoted in Albert M. Greenfield & Co., Inc. v. Kolea, supra at 357, 380 A.2d at 760. And when a rule has been *287 duly tested by experience and found inconsistent with the sense of justice or the social welfare there should be little hesitation in “frank avowal and full abandonment.” Cardozo, The Nature of the Judicial Process, 150-51 (1921), cited in Griffith v. United Airlines, Inc., 416 Pa. 1, 23, 203 A.2d 796, 806 (1964). We have followed these principles recently in several decisions which are clearly founded on a realization of, and adaption of the law to correspond to, changing social policy. Ayala v. Philadelphia Board of Education, 453 Pa. 584, 305 A.2d 877 (1973) (governmental immunity abolished) and Flagiello v. Pennsylvania Hospital, 417 Pa. 486, 208 A.2d 193 (1965) (immunity for charitable institutions abolished).

[10] [11] In reappraising antiquated laws, it is entirely proper to seek guidance from policies underlying related legislation.

The purpose of the Act is to restore substandard housing to a reasonable level of habitability as swiftly as possible and to deter landlords from allowing their property to deteriorate into a condition unfit for habitation. Newland v. Newland, 26 Pa.Cmwlth. 519, 364 A.2d 988 (1976) and Palmer v. Allegheny County Health Department, 21 Pa.Cmwlth. 246, 345 A.2d 317 (1975). The adoption of the implied warranty of habitability is consistent with this policy.

III. BREACH OF THE IMPLIED WARRANTY OF HABITABILITY

[12] *289 “The implied warranty is designed to insure that a landlord will provide facilities and services vital to the life, health, and safety of the tenant and to the use of the premises for residential purposes. King v. Moorehead, at 495 S.W.2d 75.” Pugh v. Holmes, 384 A.2d at 1240. This warranty is applicable both at the beginning of the lease and throughout its duration. Id. citing Old Town Development Co. v. Langford, 349 N.E.2d 744, 764 (Ind.App.1976) and Mease v. Fox, 200 N.W.2d 791, 796 (Iowa 1972).

[13] [14] In order to constitute a breach of the warranty the defect must be of a nature and kind which will prevent the use of the dwelling for its intended purpose to provide premises fit for habitation by its dwellers. At a minimum, this means the premises must be safe and sanitary of course, there is no obligation on the part of the landlord to supply a perfect or aesthetically pleasing dwelling. Pugh v. Holmes, 384 A.2d at 1240. “Materiality of the breach is a question of fact to be decided by the trier of fact on a case-by-case basis.” Id. Several factors (not exclusive) are listed by the Superior Court as considerations in determining materiality, including the **906 existence of housing code violations and the nature, seriousness and duration of the defect. Id.

*290 [15] Additionally, we agree with the Superior Court that, to assert a breach of the implied warranty of habitability, a tenant must prove he or she gave notice to the landlord of the defect or condition, that he (the landlord) had a reasonable opportunity to make the necessary repairs, and that he failed to do so. 384 A.2d at 1241.

[16] Appellant would require that a determination of breach of the implied warranty be dependent upon proof of violations of the local housing codes. We decline to accept this argument as it would unnecessarily restrict the determination of breach. The Supreme Court of Massachusetts was asked to define their implied warranty of habitability by reference to a housing code of statewide applicability, but declined to do so. In Boston Housing Authority v. Hemingway, 293 N.E.2d 831 (Mass.1973) that court stated:

Other courts have likewise concluded that the existence of housing code violations is only one of several evidentiary considerations that enter into the materiality of the breach issue. E. g., *291 Foisy v. Wyman, 83 Wash.2d 22, 515 P.2d 160 (1973); King v. Moorehead, 495 S.W.2d 65 (Mo.App.1973); Mease v. Fox, 200 N.W.2d 791 (Iowa 1972). This reasoning is even more persuasive in Pennsylvania where there is no statewide housing code and where many municipalities have not promulgated local housing regulations. [FN3]

FN3. Brief for Appellant at 31 notes that many small boroughs and townships have not adopted such regulations. And, according to Brief for Amicus Curiae, Central Pennsylvania Legal Services, p. 15, only six of seventy-two municipalities in York County, eleven of the fifty-nine municipalities in Lancaster County, and twelve out of seventy-five in Berks County have housing codes. In Perry County there are no municipalities with housing codes.

[17] In this case, appellee alleged ten specific defective conditions including a leaky roof, lack of hot water, leaking toilet and pipes, cockroach infestation and hazardous floors and steps. If proven on remand, these conditions would substantially prevent the use of the premises as a habitable **907 dwelling place and could justify a finding by the trier of fact that a breach of the implied warranty of habitability had occurred.

IV. REMEDIES FOR BREACH OF IMPLIED WARRANTY OF HABITABILITY

[18] As the adoption today of the implied warranty of habitability creates new legal rights and obligations, it is essential for this Court to outline and clarify some of the available remedies and the manner in which these remedies are to be implemented. The tenant may vacate the premises where the landlord materially breaches the implied warranty of habitability we have held analogously where the landlord materially breaches express covenants to repair or to maintain the leasehold in a habitable state. See McDanel v. Mack Realty Co., supra, 315 Pa. at 174, 172 A. 97. Surrender of possession by the tenant would terminate his obligation to pay rent under the lease. Lemle v. Breeden, 51 Haw. 426, 462 P.2d 470 (1969) Murray, On Contracts A Revision of Grismore on Contracts, s 183, Mutual Performances in Leases The Implied Warranty of Habitability (1974) (hereinafter Murray ).

*292 [19] [20] [21] Where the tenant remains in possession, and the landlord sues for possession for unpaid rent, the implied warranty of habitability may be asserted as a defense. Virtually all courts addressing the issue of breach of this warranty as a defense concur with this view. See e. g., cases cited by the Superior Court at 384 A.2d 1240 and Rome v. Walker, 38 Mich.App. 458, 196 N.W.2d 850 (1972); Fritz v. Warthen, 298 Minn. 54, 213 N.W.2d 339 (1973); See Restatement (Second) of Property, Landlord and Tenant, s 11.1 (Rent Abatement). If the landlord totally breached the implied warranty of habitability, the tenant's obligation to pay rent would be abated in full the action for possession would fail because there would be no unpaid rent. Pugh v. Holmes, supra, 384 A.2d at 1241, Citing Javins v. First National Realty Corp., supra, 138 U.S.App.D.C. at 380-81, 428 F.2d 1082-83. If the landlord had not breached the warranty at all, no part of the tenant's obligation to pay rent would be abated and the landlord would be entitled to a judgment for possession and for unpaid rent. Id. If there had been a partial breach of the warranty, the obligation to pay rent would be abated in part only. In such case, a judgment for possession must be denied if the tenant agrees to pay that portion of the rent not abated; if the tenant refuses to pay the partial rent due, a judgment granting possession would be ordered. Id.

[22] [23] [24] Appellant urges that the failure of the Superior Court to require a method of escrowing unpaid rent monies is “the most glaring defect” in the Superior Court's decision below. This Court is in favor of an escrow procedure, but is not inclined to make such procedure mandatory. Rather, the decision whether a tenant should deposit all or some of the unpaid rents into escrow should lie in the sound discretion of the trial judge or magistrate. The tenant may retain his rent, subject to the court's discretionary power to order him, following a hearing on the petition of the landlord or tenant, to deposit all or some of the rent with the court or a receiver appointed by the court. This is the approach taken by a majority of the courts which permit the tenant to *293 withhold rent pending the outcome of litigation in which the defense of the implied warranty of habitability is asserted. Restatement (Second) of Property, Landlord and Tenant s 11.3, Reporter's note 2 (1970) Citing, e. g., Javins v. First National Realty Corp., supra and Hinson v. Delis, 26 Cal.App.3d 62, 102 Cal.Rptr. 661 (1972). Factors to be considered include the seriousness and duration of the alleged defects, and the likelihood that the tenant will be able to successfully demonstrate the breach of warranty. Id.

[25] [26] [27] [28] Also at issue in this case is the availability of the “ repair and deduct” remedy. Appellee, after allegedly giving notice to the landlord and a reasonable opportunity to repair, repaired a broken door lock and deducted $6.00 from her rent for the month of May, 1975. We have held that, where a landlord fails to perform a lease **908 covenant, the tenant may perform it at his own expense (if reasonable) and deduct the cost of his performance from the amount of rent due and payable. McDanel v. Mack Realty Co., supra, 315 Pa. at 177, 172 A. 97 (landlord failed to perform covenant to supply heat tenant could have provided heat and deducted reasonable costs from rent). Similarly, the repair and deduct remedy is appropriate for breaches of the implied warranty of habitability. This remedy has been approved in other jurisdictions, Marini v. Ireland, 56 N.J. 130, 265 A.2d 526 (1970); Garcia v. Freeland Realty Co., 63 Misc.2d 937, 314 N.Y.S.2d 215 (1970) and by the Restatement (Second) of Property, Landlord and Tenant s 11.2. Section 11.2 provides “(i)f a tenant is entitled to apply his rent to eliminate the landlord's default, the tenant, after proper notice to the landlord, may deduct from his rent reasonable costs incurred in eliminating the default.” “Proper notice” in this instance is one that describes the default and specifies what steps will be taken by the tenant to correct it if the landlord has not eliminated the defective condition within a reasonable time. See Comment a. to s 11.2. The use of the repair and deduct remedy is not, of course, unlimited. Repairs must be reasonably priced and cannot exceed the amount of the rent available to apply against the cost, i. e. the amount of rent *294 owed for the term of the lease. Merilh v. Pan American Films, 200 So.2d 398 (La.App.1967). See comment c. to s 11.2. Further the tenant runs the risk of an adverse court finding on the necessity of the repairs if the court finds that the repairs were not needed to render the premises habitable, the court must find the rent deduction unreasonable. In such event, the landlord could obtain a judgment for the amount of rent deducted. Or if the repairs were needed but the cost was excessive, the landlord could recover the difference between the actual cost and what would have been the reasonable cost of repairs.

[29] [30] [31] Appellant also asserted a counterclaim for $25.00 for repairs allegedly made at various times to the heating system, the bathroom floor and to replace a broken window pane. In principle, we see little difference between the counterclaim for repairs and the “repair and deduct” remedy. The counterclaim can be utilized to recover damages from already paid rents based upon expenses incurred in making repairs of defective conditions after failure of the landlord to repair within a reasonable time following proper notice. See Marini v. Ireland, supra and Garcia v. Freeland Realty Co., supra, Pines v. Perssion, 14 Wis.2d 590, 111 N.W.2d 409 (1961). The limitations applicable to the repair and deduct remedy are applicable here as well the cost of the repairs must be reasonable and the maximum amount which the tenant may expend is the amount of rent owed for the term of the lease. However the counterclaim is not available where the tenant has not paid his rent for the period in which the repairs are made and the cost of the repairs do not exceed the rent owed for that period. In that case, there are no damages as the tenant has already been compensated for the cost of repairs by not paying rent.[FN4]

FN4. From the pleadings, it appears that some of appellee's counterclaims were for recovery of the cost of repairs from Already paid rents while some of the counterclaims were for repairs made during periods in which no rent was paid. If such is the case, the latter claims would fail as the appellee would have suffered no damages.

*295 [32] [33] Finally, since the lease is a contract, other traditional contract remedies such as specific performance are available to enforce the implied warranty of habitability. Javins, supra 138 U.S.App.D.C. at 380, at 428 F.2d 1082, n. 61; See Uniform Residential Landlord and Tenant Act s 4.101(b) (1972) And Blumberg and Robbins, Beyond URLTA: A Program for Achieving Real Tenant Goals, 11 Harv.Civ.Rts. Civ.Lib.L.Rev. 1 (1976). As with other contracts, however, specific performance is an equitable remedy not available as a matter of course but only in unique situations. 11 S. Williston, Contracts s 1418A (3d ed. 1968); Murray, supra at s 220.

**909 V. MEASURE OF RENT ABATED

[34] The Superior Court held, where the tenant claims the breach of warranty of habitability as a defense or counterclaim “the monthly rent past and future (until the dwelling is returned to a habitable state) may be reduced by the difference between the agreed upon rent and the fair rental value of the apartment in its present condition.” It is urged that this Court adopt the “percentage reduction of use” method of calculating damages for breach of the implied warranty (This method would reduce the amount of rent owed by a percentage equal to the percentage by which the use of the premises has been decreased by the breach of warranty.) rather than the “fair rental value” approach suggested by the Superior Court. We hold that the “percentage reduction in use” method is the correct manner of determining the amount by which the obligation to pay rent is abated.

[35] Finally, there should be no doubt that recovery will not be precluded simply because there is some uncertainty as to the precise amount of damages incurred. It is **910 well established that mere uncertainty as to the amount of damages will not bar recovery where it is clear that damages were the certain result of the defendant's conduct. Academy Spires, Inc., supra, 111 N.J.Super. at 486, 268 A.2d 556. McCormick, Damages s 27, p. 101 (1935). The basis for this rule is that the breaching party should not be allowed to shift the loss to the injured party when damages, even if uncertain in amount, were certainly the responsibility of the party in breach. Story Parchment Company v. Paterson Paper Company, 282 U.S. 555, 563, 51 S.Ct. 248, 75 L.Ed. 544 (1931). As noted by the Supreme Court of California, damages in this case “do not differ significantly from a host of analogous situations, in both contract and tort law, in which damages cannot be computed with complete certainty.” Green v. Superior Court, supra, 10 Cal.3d at 638, 111 Cal.Rptr. at 719, 517 P.2d at 1183.

ROBERTS, J., filed a concurring opinion in which NIX and MANDERINO, JJ., join.

ROBERTS, Justice.

Because, however, this case is before this Court on a demurrer, I believe any discussion of remedies and damages premature.*299 I would remand for proceedings consistent with Parts I, II, and III of the Opinion of the Court.

NIX and MANDERINO, JJ., join in this opinion.

 [案情]
埃罗埃斯•霍姆斯作为承租人根据一份口头租赁协议，从出租人皮尤处租赁了一处住宅，月租60美元。埃罗埃斯•霍姆斯自1971年11月起开始租赁该房屋。出租人皮尤提起诉讼要求承租人霍姆斯支付未付的租金，并要求取得对该住宅的占有。承租人霍姆斯提出抗辩认为出租人违反了可居住性的默示担保，并就其对房屋的维修费用要求抵销和提出反诉。

[分析]
废除买者自知理论，采纳可居住性的默示担保
买者自知理论是符合该理论产生和发展时期社会需要的。但是，我们认为该理论现在已经丧失了它的作用，应该被废除。为了和当今社会租赁的实际情况同步，就住宅租赁协议应该采纳可居住性的默示担保。

适用于出租人和承租人关系的买者自知理论，是在16世纪的英国发展起来，于19世纪被穆尔诉韦伯一案所采纳， ^[1]成为我国的法律。在穆尔案中，法院认为就租赁而言，规则是买者自知，承租人的眼睛决定了交易的盈亏。承租人应该检查他租赁的不动产，并通过对维修义务的约定保护自己的权益。在该理论发展的农业社会，法律将租赁交易视为对土地一定时间的让与，该让与涉及的关键利益是土地，土地上的任何建筑都被视为附带利益。租金被视为是由于土地产生的，而不是产生自住宅或居住者。封建社会的出租人对承租人除了明示的义务没有其他任何义务，而且承租人支付租金的义务独立于出租人的承诺。在当时，买者自知的理论是完全适用的。承租人的唯一保护是在占有租赁不动产前检查该不动产，或者从出租人处取得明示担保。出租人和承租人在协商他们的租赁协议时，被假设具有同等的谈判力量。从事农业的承租人有能力充分检查住宅，并对没有现代设施（如内设管道或强电系统）的建筑进行简单维修。随着农业社会逐渐衰退，人口集中地区从乡村向市区转移，而普通法中出租人和承租人的关系却没有发生变化。尽管事实是市区租赁协议的首要目的是房屋而不是土地，而且承租人既不可能充分检查也不可能修理市区的住宅，出租人却仍然对其出租的房屋不承担任何默示义务，由承租人自担风险。

时代发生了变化，法律也应随之而变。今天，可居住性默示担保的理论在美国已经得到多数法院的认可。该理论已经被40多个州以及哥伦比亚特区的上诉法院和立法机关所采纳。可居住性默示担保承认当今的承租人不再关注土地，而是要求适宜居住的住宅。从功能上看，当今公寓的居住者是住宅服务的消费者。现在的住宅租赁设想的是一个人（出租人）作为收取定期付款（租金）的交换提供打包的货物、服务、权利和义务。对这一经济现实的经典描述是：美国城市居民，不管是贫穷还是富有，他们在寻找住宅时，都是在寻求打包的货物和服务，这里面不仅包括墙壁和屋顶，还包括足够的供暖、采光和通风，运行良好的管道系统、安全的门窗、良好的卫生设施和适当的维护。而且，在当今社会，承租人与出租人相比有可能处在严重的劣势。承租人常常迫于需要不得不住进差强人意，多处需要维修的房屋。严重的住房短缺迫使承租人同意出租人关于租赁条件的要求，而这些要求在通常条件下，如果住房充足的话，承租人是不会也不应该答应的。一般的承租人不再处于自由谈判的地位，准出租人和准承租人在就租赁协议进行谈判时，也不再是处于公平的地位。

上诉法院认为，采纳可居住性默示担保的理论，不是完全和突然的割裂历史，而是在美国酝酿多年的法律的进一步发展，这种认识是非常正确的。我们确认上诉法院的认定：租赁协议的性质是合同，应该受到合同法原则的约束。租赁协议中的约定和担保是相互依赖的。因此，承租人支付租金的义务，以及可居住性默示担保加于出租人提供和维护可居住房屋的义务，这两个义务是相互依赖的，一方对义务的实质违反，只要这种违反持续存在，就免除了另一方对义务的履行。

对可居住性默示担保的违反
出租人认为上诉法院未能确立判断可居住性和违反担保的明确标准，因此是有错误的。我们不这么认为，上诉法院界定了该担保的范围。
可居住性的默示担保目的是确保出租人提供对于承租人生活、健康和安全，以及对住宅使用至关重要的设施和服务。这一担保在承租期开始时以及租期内都适用。要构成对该担保的违反，房屋的缺陷必须阻碍住宅用于其意图的目的——为居住者提供适宜居住的房屋。适宜居住意味着至少该房屋应该安全和卫生。当然，出租人并没有义务提供完美的或赏心悦目的房屋。对该担保的实质违反是事实问题，需要事实的审理者基于个案的情况进行判断。上诉法院列出了若干因素（并没有穷尽）作为判定对该担保实质违反的考虑因素，其中包括对住宅准则的违反，缺陷的性质、严重程度和持续时间。我们认为这些标准完全能够指导事实的审理者对实质违反担保做出判断。而且，这些标准也十分灵活，使得可居住性理论可以在普通法传统中逐渐发展。

另外，我们也赞成上诉法院的以下观点：承租人要主张对可居住性默示担保的违反，必须证明他/她告知了出租人房屋缺陷的状况，出租人有合理机会进行必要的维修却未能这样做。本案出租人认为，判定对该默示担保的违反，需要证明违反当地的住宅准则。我们不能接受这样的主张，这将会不合理的限制对违反担保的判定。马萨诸塞州最高法院被要求根据适用于该州的住宅准则界定可居住性默示担保，该法院拒绝这样做，认为：规定适合人类居住最低标准的州卫生准则，以及任何有关的当地卫生规章，为初审法院提供了所有房屋必须符合的最低要求。证明违反这些规章的证据，通常构成该房屋不适宜居住的强有力的证据，不论这些证据根据旧的案例法是否足以证明推定驱逐。但是可居住性默示担保提供的保护并不一定与准则一致。可能存在准则没有规定的状况使房屋不适于居住。尽管我们已经不再使用推定驱逐的抗辩，代之以可居住性默示担保的抗辩，但是某个事实情况如果可以表明推定驱逐，就会成为证明实质违反可居住性默示担保的证据，不论是否存在对卫生准则的违反。

其他法院也认为，对住宅准则的违反只是就实质性违反担保问题的证据之一。在宾夕法尼亚州，这一理由就更有说服力，因为本州没有州内普遍适用的住宅准则，很多城市也没有颁布当地的住宅准则。在本案中，承租人称租赁房屋存在10处缺陷，包括屋顶漏水、没有热水供应、洁具和管道漏水、房间有蟑螂，以及房屋的墙壁和楼梯都处于危险状态。如果这些在重审时被证明是真实的，那么这些情况将实质性的阻碍将该租赁房屋用于住宅用途，事实的审判者可以据此认定存在对可居住性默示担保的违反。
对违反可居住性默示担保的救济
鉴于采纳可居住性默示担保创设了新的权利和义务，本院对该担保被违反时的救济及其执行的方式进行界定和澄清就十分必要。出租人实质性的违反可居住性默示担保，承租人可以搬出租赁房屋。承租人放弃对租赁房屋的占有，将解除其依据租赁协议支付租金的义务。

如果承租人继续占有租赁房屋，出租人提起诉讼要求支付未付租金和取得对租赁房屋的占有，那么承租人可以将违反可居住性默示担保作为抗辩。如果出租人完全违反了可居住性默示担保，承租人支付租金的义务将完全免除，出租人要求取得占有的诉讼将完全败诉，因为不存在未付的租金。如果出租人没有违反可居住性默示担保，那么承租人支付租金的义务就没有被免除，出租人就有权要求判决承租人支付未付租金，并取得对租赁房屋的占有。如果出租人只是部分违反可居住性默示担保，承租人支付租金的义务只会被部分免除。在这种情况下，如果承租人同意支付未免除部分的租金，那么就不能做出出租人取得对租赁房屋占有的判决。如果承租人拒绝支付应当支付部分的租金，那么法院就可以做出出租人取得对租赁房屋占有的判决。
本案出租人主张上诉法院未能要求将未付租金提存，是上诉法院判决中最明显的缺陷。本院也赞成提存程序，但是不认为该程序是强制性的。承租人是否应将部分或全部的未付租金提存应由初审法院妥善行使裁量权决定。承租人可以暂停支付租金，法院在根据出租人或承租人的请求举行听证后，可以行使裁量权命令承租人将全部或部分租金为出租人提存于法院或法院指定的管理人。法院在行使裁量权时需要考虑的因素是：承租人声称的租赁房屋缺陷的严重性和持续的时间，承租人成功证明违反默示担保的可能性。
在本案中，另一个争议是，是否存在承租人自行修理从租金中扣除修理费用的救济。承租人称其通知了出租人，给予出租人进行修理的合理机会后，对坏了的门锁进行修理，从其1975年5月的租金中扣除了6美元。我们曾经认定，当出租人未能履行租赁协议中的承诺，承租人可以自担费用（应合理）履行该承诺，并将他履行承诺的费用从应付租金中扣除。这一救济对于违反可居住性默示担保也是同样适用的。财产法重述二第十一章出租人和承租人第二节规定：如果承祖人有权用租金消除出租人的违约，则承租人在给予出租人适当通知后，可以将承租人在消除出租人违约时发生的合理费用从其租金中扣除。在这种情况下，“适当通知”需要描述违约情况，以及明确如果出租人不再合理时间内消除房屋缺陷，承租人将采取的补救措施。当然，使用修理并扣除的救济也不是毫无限制的。修理费用必须合理定价，并且不能超过可以用于抵销修理费用的租金数额，也即租赁期应付的租金数额。而且承租人要承担法院认为维修不必要的风险。如果法院认为维修对于房屋的适宜居住时不必要的，就必然认定扣除租金是不合理的。在这种情况下，出租人就可以获得被扣除租金数额。或者维修是必要的，但是费用超过合理数额，出租人就可以追回实际花费和维修合理成本之间的差额。

承租人还就其对供热系统、淋浴房地板的维修，以及更换窗玻璃提出25美元的反诉。从原则上，我们认为就维修费用提出反诉和“维修扣除”救济没有实质性的区别。反诉可以被用来从已经支付的租金中获得损害赔偿，该损害赔偿是基于承租人给予出租人适当通知后，出租人未能在合理时间内维修，承租人发生的维修费用。对“维修扣除”救济的限制对反诉也同样适用。维修的费用必须合理，承租人支出的数额最多不超过租赁期未付的租金。但是，如果承租人维修发生在未支付租金的期间，且维修的费用不超过该期间未付租金，反诉就得不到支持。在这种情况下，承租人通过不支付租金已经就其维修费用得到了补偿，因此不存在损害。
因为租赁协议也是合同的一种，因此传统的合同救济方法如实际履行也可以用来强制执行可居住性默示担保。但是和其他合同一样，实际履行作为衡平法的救济只有在特殊情况下才能获得。

扣除租金的标准
上诉法院认为，当承租人将违反可居住性默示担保作为抗辩或以此提起反诉，租赁房屋的月租金（直到租赁房屋回复到可居住状态）可以被降低，降低的数额为租赁协议约定的租金与租赁房屋现在状况下的公平租赁价值之间的差额。本院被要求采用“使用减少比例”法（“使用减少比例”法是将未付租金减少一定百分比，该百分比与违反默示担保导致的租赁房屋使用减少的百分比一致）而不是上诉法院采用的“公平租金价值”法计算违反默示担保的损害赔偿。我们认为“使用减少比例”法是确定扣减支付租金数额的正确方法。
“公平租金价值”法有两个缺点。首先，该法假设就有缺陷的房屋存在一个公平市场。考虑到当今的住宅危机，这一假设是有问题的。由于住房短缺，在统常情况下根本无人问津的房屋，在租赁市场上都有很大需求。其次，该方法在实际操作中存在问题。确定缺陷房屋的公平市场价值需要一些类型的市场调查，统计数据证据或熟悉当地租赁市场的房地产经纪人或评估师的专家证言。取得这些证据或证言的成本对很多承租人，特别是低收入的承租人，都是无法承受的。
根据“使用减少比例”法，租金降低一定比例，该比例反映了由于房屋存在缺陷导致对可居住性默示担保的违反使租赁房屋在使用价值上的减损。该计算方法更好的实现了使受损害者（承租人）回到如果承诺按照担保履行其应当处于的地位。承租人要求的是适宜居住的房屋，租赁价格反映的是双方对房屋价值的认定。因此，如果租赁房屋全部或部分不适合居住，合同价格（由租赁协议确定）将被降低一定比例，该比例反映按意图目的对房屋使用的减损。该计算方法的另一优点是很多情况下可能不需要专家证词，因为外行人也可以确定对住宅使用的减损比例。

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承租人就推定驱逐主张暂停支付租金或解除租赁协议，就必须搬出租赁的不动产，这对于租赁低质量房屋的承租人是不现实的，因为他们不大可能找到替代的房屋；而且，承租人主张推定驱逐搬出租赁不动产也冒着很大的风险，如果法院认为出租人的行为并不构成推定驱逐，承租人反而要因违反租赁协议向出租人承担责任。因此，推定驱逐规则并不能对承租人提供很好的保护。
有鉴于此，法院进一步发展出可居住性默示担保的理论。法院认为租赁协议的性质是合同，应该受到合同法原则的约束。就像买卖合同中卖方就出售的货物有商销性默示担保义务一样，在租赁协议中，出租人就出租的不动产也有可居住性默示担保义务。有些州认为出租人只有义务保证在租赁开始时，租赁的不动产处于适宜居住的状态。有些州认为，出租人在租赁开始时和租赁期间都有义务保证租赁的不动产处于适宜居住的状态。本案法院采取后一种观点。
基于可居住性默示担保，承租人主张暂停支付租金，或以租金抵销修理费用，无需搬出租赁的不动产。可居住性默示担保相较于推定驱逐能更好的保护承租人的利益。
需要注意的是，可居住性默示担保主要适用于住宅用途的租赁，商业用途的租赁则很少适用。因为，一般认为商业用途租赁的承租人通常比住宅用途租赁的承租人谈判能力强，不需要法院给予特别的保护。