Exculpatory Clause in Lease
EXCULPATORY CLAUSE IN LEASE ABSOLVING LANDLORD OF LIABILITY FOR ANY OCCURRENCE ON RENTAL PROPERTY IS OVERLY BROAD, UNENFORCEABLE.
The Supreme Court of Idaho held that exculpatory clause in a lease that absolves a landlord of liability for any occurrence on the rental premises is overly broad and unenforceable.
Here, Jesse sued the owner of her apartment complex for failure to maintain the premises after she fell into a sinkhole in a planting area on the property. A trial court granted defendant summary judgment, finding that an exculpatory clause in plaintiff’s lease immunized him from liability.
Reversing, the state high court first reviewed a landlord’s common-law duties to a tenant as well as those under the state’s implied warranty of habitability law, Idaho Code Ann. §6-320. A landlord must exercise reasonable care to protect a tenant, and this includes the duty to maintain the premises in a condition not hazardous to the tenant’s health or safety, the court said. Noting that a landlord has the freedom to contract away certain duties and liabilities, the court pointed out, however, that such exculpatory clauses must “speak clearly and directly” to the injury-causing conduct.
There are two public policy exceptions to this rule exempting a party from liability for negligence, the court said. The first is when one of the parties is at an obvious disadvantage in bargaining power, and the second is when a public duty is involved. When the state legislature passed §6-320, it established such a public duty of landlords to maintain their premises—areas covered by a lease—in nonhazardous conditions. The lease at issue here does not cover the planting area where plaintiff fell, and public policy does not require areas not necessary for habitation to be subject to the same nonhazardous conditions requirements, the court said. Thus, the only question is whether the exculpatory clause is enforceable as written.
Looking to the language of the clause, which states that a landlord is not liable for any occurrence anywhere on the property, the court found it to be too broad because it does not speak “clearly and directly” to what conduct it immunizes.
