Hilder rented an apartment from St. Peter. There were a
number of problems with the apartment, from broken windows to broken locks
to broken toilets. St. Peter repeatedly promised to fix the problems but
failed to take action.
After 14 months, Hilder moved out and sued St. Peter for
breach of warranty of habitability.
The Trial Court found for Hilder and ordered St. Peter to
pay $5k, which was all rent paid plus compensatory damages. St. Peter
The Trial Court found that the state of disrepair of the
apartment substantially reduced the value of the leasehold from the
agreed rental value.
St. Peter claimed that since Hilder never abandoned
the property she should not recover 100% of the rent.
The Vermont Supreme Court affirmed, but remanded for
recalculation of damages.
The Vermont Supreme Court found that the rental of any
residential dwelling unit comes with an implied warranty of habitability in the
lease, that the landlord will deliver over and maintain, throughout the
period of tenancy, premises that are clean, safe, and fit for human
habitation. This warranty covers all latent and patent defects in the
essential facilities of the residential unit.
"Essential facilities" are facilities vital to
the use of the premises for residential purposes.
The Court found that any substantial
violation of an applicable housing code shall constitute prima facie
evidence of a breach of the warranty of habitability.
The Court found that damages should be calculated
as the difference between the value of the property as warranted and the
value as it exists. In addition, compensatory damages can be awarded for
tenant's discomfort and annoyance.
However, in order to recover, the tenant must show that
they notified the landlord of the problem and the landlord failed to
correct it within a reasonable period of time.
The Court found that the Trial Court did
not explain how they calculated compensatory damages, so they remanded
for a recalculation.
Although punitive damages are not normally awarded under
Contract law, they can be awarded in especially "willful, wanton,
and fraudulent" cases to set an example.