Landlords can breathe a little easier following a recent Michigan Court of Appeals decision concerning the statutory duty owed to a non-tenant to keep residential premises fit for their intended use and in reasonable repair.
MCL 554.139(1) provides that, in “every lease or license of residential premises,” the lessor or licensor “covenants” that “the premises and all common areas are fit for the use intended by the parties” and to “keep the premises in reasonable repair during the term of the lease or license.” Back in 2008, the Michigan Supreme Court, in Allison v AEW Capital Mgmt, LLP, determined that the covenants under MCL 554.139(1) apply only to contracts between a lessor and his or her lessees or licensees; as such, the court held that “a non-tenant could never recover under the covenant for fitness because a lessor has no contractual relationship with – and, therefore, no duty under the statute – to a non-tenant.”
The Michigan Supreme Court’s holding in Allison was recently reviewed by the Michigan Court of Appeals in Cunningham v McKinley, Inc. In Cunningham, the plaintiff lived in an apartment leased by her friend. The plaintiff fell down a set of carpeted stairs in the apartment complex and brought suit alleging a theory of statutory liability. In addressing the plaintiff’s argument, the court found that the plaintiff was not a tenant of the subject apartment complex and was therefore owed no statutory duty.
To determine whether the plaintiff was a tenant, the court looked to a variety of factors including the following:
- Whether there was permission or consent by the landlord to occupancy by the tenant
- Whether there was a subordination of the landlord’s title and rights to the tenant
- Whether there was a reversion in the landlord
- Whether there was the creation of an estate in the tenant
- Whether there was a transfer of possession and control of the premises to the tenant
- Whether there was a contract, either express or implied, between the parties
The court found that the plaintiff was not a party to the lease and did not register as an adult resident under her friend's lease. Moreover, there was no evidence that the plaintiff ever paid rent to the apartment complex or that she was legally obligated to pay rent. In addition, there was no record evidence that the apartment complex agreed to transfer possession of the apartment to the plaintiff for consideration.
Accordingly, the court concluded that the plaintiff did not have a landlord-tenant relationship with the subject apartment complex and was therefore not entitled to the protections afforded under MCL 554.139 as a lessee.
The plaintiff further argued that, even if she was not a lessee, she was, nevertheless, a licensee under MCL 554.139. The court addressed this argument and concluded that, although a landowner may orally convey a license, the plaintiff did not present any evidence that the apartment complex agreed to give her any rights to which the covenants under MCL 554.139 could apply.
Rather, the record evidence established that the plaintiff’s friend granted her permission to reside at the subject apartment complex and the complex’s agents either knew or should have known that the plaintiff was living with her friend. However, despite this knowledge or purported knowledge, the court concluded that this evidence only served to establish that the plaintiff was a long-term guest of her friend, not that the apartment complex entered into an agreement with the plaintiff.
Therefore, the plaintiff was not a licensee for the purposes of MCL 554.139.
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