Implied Warranties in Leases: The Need for Change

“Caveat emptor” as it is applied to leases under which the lessee may use the demised premises for an express purpose is the focal point of this article. The rule denies the lessee relief, either as a defense or as a cause of action, for additional costs of repair or construction if the premises are structurally unfit for the expressed purpose or if changes must be made in the premises to conform to local codes relating to that purpose. Mr. Skillern discusses the development of the rule in these Situations, the limited remedies which are available to a lessee, and the inadequacies of these remedies in modern leasing transactions. He urges that changes in the nature of leasing transactions necessitate that courts or legislatures consider implying warranties of fitness for a particular purpose and of conformity to building codes in such leases. Mr. Skillern concludes by analyzing the nature of the proposed warranties, the prerequisites for their implication, and the new remedies which would be available if they were breached.