The Michigan Court of Appeals recently found unenforceable an exculpatory clause in a residential lease that attempted to negate the landlords' duty to warn of latent defects on the premises. Calef v West, No. 226873 (Mich. Ct. App. Oct. 11, 2002). The court held that the exculpatory clause violated the Truth in Renting Act, MCL 554.631.
The plaintiff-tenant leased a house in Flint from the defendant-landlords in January 1999. Several weeks later, the tenant was injured after he stepped into a snow-covered hole in the front yard, apparently created when the landlords removed a fence post. The landlords argued that because the lease modified their statutory duty to keep the premises in reasonable repair, as permitted by MCL 554.139(2), they owed no common law duty to warn the tenant about latent defects. The tenant asserted that the exculpatory clause of the lease violated MCL 554.633(1)(e), which provides, in pertinent part:
(1) A rental agreement shall not include a provision that …:
(e) Exculpates the lessor from liability for the lessor’s failure to perform, or negligent performance of, a duty imposed by law.
The trial court granted the landlords' motion for summary disposition based on the exculpatory provision of the lease. Specifically, the lease provided:
Landlord, Owners of the property, or their agents, shall not be liable for any damage or injury to the Tenant, or to any other person, or for any property, occurring on the premises, or any part thereof, or any common areas, thereof. Tenant agrees to hold Landlord, Owner and their agents harmless from any and al [sic] claims for damages. Tenant is encouraged to obtain and keep in force, during the term of this agreement, sufficient insurance coverage, to protect the tenant, and all other parties, from the above.
In reversing the trial court, the Court of Appeals distinguished between the landlords' duty to warn of latent defects and their obligation to make repairs. It found that the exculpatory clause violated MCL 554.633 and was therefore unenforceable. In reaching its decision, the Court of Appeals relied on Feldman v Stein Bldg. & Lumber Co., 6 Mich App 180; 148 NW2d 544 (1967). The Feldman opinion held that exculpatory clauses in residential leasehold agreements are void as against public policy to the extent that they purport to immunize the landlord from tort liability for breach of a statutory duty. The Feldman court added that, when public policy comes into conflict with the principle of freedom of contract, public policy takes precedence. Therefore, a landlord’s attempted waiver of a duty through a contract is against public policy, and any contract that attempts to waive a common-law duty is unenforceable.
Secrest, Wardle Notes:
In the instant case, the landlords' duty to warn arose from common law and therefore the exculpatory clause violated MCL 554.633. Because the exculpatory clause in the lease attempted to negate the landlords' duty to warn, it was unenforceable.
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