## Facts

- Plaintiffs purchased a 30-unit apartment building in Venice, California, on May 18, 1977, and operated it through a management company.
- The next day, management notified tenants of a substantial rent increase.
- Tenants, acting through an association, notified management they would withhold future rent due to building disrepair and the rent increase.
- Tenants alleged management refused to repair occupied units, indicating repairs would be made only to vacant apartments and common areas.
- Landlords served three-day notices to pay increased rent or quit and filed consolidated unlawful detainer actions.
- Tenants asserted breach of the implied warranty of habitability, citing defects including cracks, peeling paint, leaks, inadequate heat, electrical and heating problems, broken windows, and rodent and cockroach infestations.
- A jury returned verdicts for landlords against four tenants; those tenants appealed based on erroneous jury instructions limiting the habitability defense.

## Issues

1. Whether a tenant impliedly waives the implied warranty of habitability by continuing to live in defective premises despite knowing of the defects.
2. Whether a tenant is barred from asserting the warranty-of-habitability defense for failing to allow the landlord a reasonable time to repair before withholding rent.
3. Whether tenants may assert breach of the implied warranty of habitability in an unlawful detainer action when the defects predated the landlord’s ownership.

## Decision

- The California Supreme Court reversed the judgments for the landlords and remanded.
- Continued occupancy, even with knowledge of defects, does not constitute an implied waiver of the implied warranty of habitability.
- The landlord’s notice and opportunity to repair are relevant to whether there is a breach and to damages, but failure to wait a fixed “reasonable time” before withholding rent is not a categorical bar to the defense.
- The implied warranty of habitability runs with the premises and binds successor landlords, even as to preexisting defective conditions.
- Jury instructions conditioning the defense on (a) tenant lack of knowledge at move-in and (b) landlord having a reasonable time to repair while the tenant remained in possession were erroneous and could have misled the jury.

## Legal Principles

- Residential leases include an implied warranty of habitability, enforceable defensively in unlawful detainer actions for nonpayment of rent.
- A tenant does not impliedly waive the warranty of habitability merely by remaining in possession of substandard premises.
- Landlord notice and an opportunity to repair are fact considerations bearing on breach and remedy, not absolute prerequisites that automatically defeat the defense.
- Successor landlords assume habitability obligations for existing conditions affecting habitability; tenants may raise current uninhabitable conditions regardless of when disrepair began.

## Conclusion

The court held that the implied warranty of habitability remains available as a defense to nonpayment-based unlawful detainer without being forfeited by a tenant’s continued occupancy, and that the warranty binds successor owners; instructions imposing tenant-knowledge and rigid repair-opportunity conditions improperly restricted the defense and required reversal.


Knight v. Hallsthammar, 29 Cal. 3d 46 (Cal. 1981)