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Real Estate Litigation

Implied Warranty of Habitability

What repairs are landlords required to make to their rental properties without a tenant first providing notice of the needed repair?  When does a tenant have an obligation to notify their landlord of a needed repair before the landlord must step in and fix the problem?  These questions, although addressed in North Carolina’s Residential Rental Agreements Act, are unclear based on a 1992 decision of the North Carolina Supreme Court.

These questions are largely addressed by a legal doctrine known as the Implied Warranty of Habitability.  The Implied Warranty of Habitability requires landlords to provide tenants with a safe and habitable rental property.  This means that the rental property must meet certain minimum standards, and if a landlord fails to meet these standards, the tenant will be provided with certain remedies at law.  Landlords have been held to this common-sense standard for decades.[1]  North Carolina caselaw provides substantial details of landlords’ failures to provide a safe and habitable property for their tenants, showing the real-world applicability of the doctrine.

North Carolina has codified its own version of the Implied Warranty of Habitability; it can be found in the statute codifying the Residential Rental Agreements Act, section 42–42.[2]  This statute contains two commonly litigated provisions:  subsections (a)(2) and (a)(4).

Subsection (a)(2) codifies the well-known implied warranty of habitability, discussed above.  This subsection requires landlords to “[m]ake all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition.”[3]  Like the implied warranty of habitability, the plain language of this subsection provides tenants with an absolute guarantee from their landlords that the rental property will be “habitable.”[4]

Subsection (a)(4) provides a separate protection for tenants when it comes to repairs of certain facilities and appliances, but comes with a notice requirement that tenants must comply with in order for it to apply.[5]  Subsection (a)(4) requires landlords to “[m]aintain in good and safe working order and promptly repair all electrical, plumbing, sanitary, heating, ventilating, air conditioning, and other facilities and appliances supplied or required to be supplied by the landlord provided that notification of needed repairs is made to the landlord in writing by the tenant, except in emergency situations.[6]

Each provision is beneficial and sensible; landlords maintain an absolute duty to keep the premises fit and habitable for their tenants based on subsection (a)(2), while tenants are required to notify their landlord in writing if any of the appliances listed in subsection (a)(4) need repair before the landlord can be held responsible for a defect with one of these appliances.

These provisions sound great in theory, but our state’s highest Court muddled the waters in a landmark decision, DiOrio v. Penny.[7]  In this case, the Supreme Court of North Carolina considered a slip and fall accident that occurred in a rental property in 1986.[8]  To summarize, the plaintiff, Mrs. DiOrio, leased a two-story house that was between 75 and 100 years old.[9]  The staircase in the house was covered by a carpet, and the height of the steps on the staircase was uneven—ranging from four inches at the bottom to nine-and-a-half inches at the top.[10]  Further, the staircase “had no railing, was narrow, and had lighting at the top and bottom,” but there is no indication that the stairs themselves were lit.[11]  After six months of living in the house, Mrs. DiOrio, “while descending the staircase barefoot at night, slipped and fell. She sustained a compound fracture of the arm and a severed artery.”[12]

Mrs. DiOrio brought suit against Mr. and Mrs. Penny, her landlords, for negligence due to the personal injuries Mrs. DiOrio suffered as a result of the fall.[13]  The Pennys denied liability, asserting contributory negligence (North Carolina’s defendant-friendly rule serving as a complete bar in negligence cases) as a defense.[14]  Ultimately, the trial court granted summary judgment in favor of the Pennys, and the Court of Appeals affirmed the trial court, holding that Mrs. DiOrio’s contributory negligence barred her from recovering.[15]  However, Judge Greene of the Court of Appeals dissented.  Based on Judge Greene’s dissent, the Supreme Court considered whether the Court of Appeals properly affirmed the trial court’s grant of summary judgment.[16]

In considering the facts, the Supreme Court noted that “the plaintiff had used the stairs at least twice a day for nearly six months, and that by her own admission she was aware they presented a danger in that she had to catch herself on the wall while descending on more than one occasion.”[17]  At this point, the Court was seemingly prepared to affirm based on the finding of contributory negligence.  However, in an unexpected twist, the Court chose a different path to affirming the Court of Appeals’ decision:

The plaintiff relies upon N.C.G.S. § 42–42(a)(2), from the Residential Rental Agreements Act, which states that it is the duty of a landlord to “[m]ake all repairs and do whatever is necessary to put and keep the premises in a fit and habitable condition.” Plaintiff contends that the defendants were negligent in this case because they failed to repair a dangerous staircase, causing plaintiff to suffer personal injury. However, the statute requires that a landlord must have knowledge, actual or imputed, or be notified, of a hazard’s existence before being held liable in tort. N.C.G.S. § 42–42(a)(4) (1984). Plaintiff never notified the defendants about any problems with the staircase and never attempted to repair the staircase herself. Further, the record is clear that plaintiff also failed to project or forecast solid evidence that the defendants actually were informed or had actual knowledge of a dangerous staircase.[18]

Here, in the most pivotal portion of the opinion, the Court made a fatal error.  In considering the Residential Rental Agreements Act, the Court imputed the notice requirement from subsection (a)(4) into subsection (a)(2).  Although subsection (a)(4) explicitly requires written notice by the tenant in order for tort liability to apply, subsection (a)(2) is completely void of any such requirement.  Moreover, subsection (a)(4) only applies to the landlord’s repair of “facilities and appliances supplied or required to be supplied by the landlord”;[19] it does not, however, expressly apply to stairs.  Nonetheless, the DiOrio Court held that the lack of notice was sufficient to uphold the trial court’s grant of summary judgment in favor of the landlord.[20]

The Court’s opinion in Diorio has gone unquestioned for 30 years.  In that time, it has been cited in fifteen reported Court of Appeals opinions, none of which are contrary to the Supreme Court’s decision.  Left unchecked, this opinion leaves landlords’ and tenants’ obligations to one another unclear.  Both landlords and tenants would benefit from clarity surrounding the confusing situation left behind by DiOrio.

The most clear-cut way to remedy the DiOrio debacle would be for the North Carolina General Assembly to step in and shore up the language of section 42–42.[21]  The Legislature could amend the Residential Rental Agreements Act to state the intended functions of each subsection more specifically:  Under subsection (a)(4), landlords have an absolute duty to keep residential rental properties in a safe and habitable condition, regardless of the tenant providing notice of known defects, and the failure to do so constitutes a breach of this subsection.  However, Landlords do not have the same obligation when it comes to the appliances and facilities covered by subsection (a)(4).  Only when a tenant provides the landlord with written notice do subsection (a)(4)’s repair obligations kick in.  Although the current statute does appear to stand for these principles, the Legislature can and should clarify these provisions moving forward.

[1] See Javins v. First National Realty Corp., 428 F.2d 1071 (4th Cir. 1970).

[2] N.C.G.S. § 42–42 (2022).

[3] N.C.G.S. § 42–42(a)(2).

[4] Id.

[5] N.C.G.S. § 42–42(a)(4).

[6] Id. (emphasis added).

[7] DiOrio v. Penny, 331 N.C. 726, 417 S.E.2d 457 (1992).

[8] Id. at 727, 417 S.E.2d at 458.

[9] Id.at 726, 417 S.E.2d at 458.

[10] Id at 726–27, 417 S.E.2d at 458.

[11] Id. at 727, 417 S.E.2d at 458.

[12] Id.

[13] Id.

[14] Id.

[15] Id.

[16] Id.

[17] Id. at 729, 417 S.E.2d at 459.

[18] Id.

[19] N.C.G.S. § 42–42(a)(4).

[20] DiOrio, 331 N.C. at 729, 417 S.E.2d at 459.

[21] DiOrio is the subject of an appeal pending before the Court in the case Terry v. Public Service Company of North Carolina, Inc., 287 N.C. App. 362, 883, S.E.2d 196 (2022), with the dissent, authored by Judge Carpenter, specifically citing to DiOrio.  The Court could choose to clarify the distinctions between subsections (a)(2) and (a)(4) in this case.

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