Opinion ID: 2330376
Heading Depth: 2
Heading Rank: 2

Heading: Terms Applying to Holdover Tenancy

Text: [¶ 9] Small and Cunningham contend that the Superior Court erred by substituting common law rules regarding holdover for the express and precise terms of the written lease agreement by the parties. They contend that because there was no letter written by Durango pursuant to paragraph 20 of the lease consenting to their retention of the leased premises, the terms of the lease, including the provisions in paragraph 9 governing loss and damage to personalty, were not applicable. Accordingly, Small and Cunningham argue that Durango can and should be held liable for negligence as to the flooding and the fire. [¶ 10] The common law governs relations between a landlord and tenant unless there is an agreement between the parties to the contrary. See Cunningham v. Holton, 55 Me. 33, 38 (1867) (holding that [i]n the absence of express stipulation it is a general rule of the common law, that, if a tenant hold from year to year, notice must be given ending with the year of the tenancy). [¶ 11] Pursuant to paragraph 20 of the lease, if Small and Cunningham were holding over beyond the term of the lease with the written consent of Durango, a fact which is disputed, then they would be tenants at will, subject to all of the terms and conditions of the lease, including the payment of rent. If the holdover was without the written consent of the landlord, as Small and Cunningham contend, then they would not be tenants at will, and, they argue, they should not be subject to the terms and conditions of the lease. [¶ 12] Although the lease states that a tenancy at will is not created in such a holdover situation, it does not state what type of tenancy is created, nor does the lease set out the terms of such a tenancy. The Superior Court concluded that Small and Cunningham were holdover tenants, regardless of whether a tenancy at will was created. [2] The Superior Court relied on the common law, under which the legal positions of a landlord and tenant during a holdover period are the same as during the period of the lease, unless the lease expressly and unambiguously disclaims any of these rights and responsibilities. See RESTATEMENT (SECOND) OF PROPERTY § 14.7 cmt. b (1977). This common sense rule that disputes are governed by provisions of the lease recognizes and preserves a continuity of expectations of rights and duties during a period of holdover. [¶ 13] The lease in this case provided for the contingency of a holdover period: that a tenancy at will, subject to all of the terms of the lease, would be created if the landlord consented in writing to the holdover. Without this written permission of the landlord, no tenancy at will is created, and the tenant is subject to eviction without the common law notice requirements. The lease, however, does not modify or otherwise unambiguously disclaim any other terms of the lease during such a holdover period, including paragraph 9 of the lease, when the landlord does not give written permission. Accordingly, there is no error in the Superior Court's conclusion that all the terms of the lease, except notice to vacate, remain applicable during Small and Cunningham's holdover, and although there is a genuine issue of fact regarding the January 2004 letter, this is not material to this case. See Burdzel, 2000 ME 84, ¶ 6, 750 A.2d at 575. Such a result is anticipated by the lease agreement, and is also consistent with the common law. B. Small and Cunningham's Claims for Damages to Property [¶ 14] Small and Cunningham allege that the personal property of their business was damaged as a result of Durango and Turner Barker's negligent maintenance of the building, resulting in the initial flooding from the water boiler, and the subsequent fire caused by the use of equipment to dry out the other business in the building affected by that flooding. [¶ 15] Paragraph 9 of the lease, however, expressly provides that Small and Cunningham bear the risk of loss for their personal property contained within the premises, and that they agree to hold Durango (and Turner Barker as Durango's agent) harmless for any loss, even when that loss stems from a condition of the building. [¶ 16] Accordingly, under provisions of the lease still applicable to Small and Cunningham during their holdover period, whether with or without Durango's written consent, Small and Cunningham bore the risk of loss to their property, and cannot now seek to hold Durango and Turner Barker liable for that loss. Indeed, it would be strange if Small and Cunningham were responsible for having contents insurance and for any loss that occurred to their property during the term of the lease, but did not have such a responsibility during a period of holdover even though the lease did not specifically state that the provisions of paragraph 9 no longer applied. Absent a specific provision in the lease, Small and Cunningham were not in a better position for having remained in the premises beyond the expiration of the lease.