In 2019, contravening well-settled Texas law, the Texas Supreme Court held that a commercial tenant may terminate a lease based on a landlord’s prior material breach of the lease. Rohrmoos Venture v. UTSW DVA Healthcare, LLP, 578 S.W.3d 469 (Tex. 2019). Specifically, Rohrmoos held that a commercial landlord’s material breach—at least one that might also qualify as a breach of the implied warranty of suitability – justifies a tenant’s recission of the lease. (The record is not wholly clear, but it appears the material breach was moisture penetration at the tenant’s dialysis clinic resulting in state health inspectors’ “critici[sm]” of the facility. 578 S.W.3d at 475-76. The tenant in this case had built the stand alone clinic.) 578 S.W.3d at 482-83. The Rohrmoos decision effected a seismic shift in Texas landlord-tenant law that this article briefly explores. This article focuses on Rohrmoos’—apparent—collapsing of the distinction between the implied warranty of suitability in a commercial lease and a material breach of lease and offers insight into what both transactional and litigation lawyers should consider in evaluating commercial leases post-Rohrmoos.

Prior to Rohrmoos the Texas Supreme Court first held in Kamarath v. Bennett, 568 S.W.2d 658, 660-61 (Tex. 1988), that a residential tenant may withhold rent if the landlord breaches the implied warranty of habitability. The Court did not address recission as a remedy, and it noted there was no evidence that the tenant waived the implied warranty of habitability in the oral lease. Later, in Davidow v. Inwood N. Pro. Grp., 747 S.W.2d 373, 376-77 (Tex. 1988), the Court extended Kamarath to commercial leases, finding an implied warranty of suitability exists in commercial leases except where the parties “expressly agree that the tenant will repair certain defects[] . . . .”  The Court also noted the longstanding rule in Texas that “landlord’s covenant to repair the premises and the tenant’s covenant to pay rent are independent covenants.”  Id. at 375.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]