A commercial tenant can take to trial its claims that the landlord broke the lease by causing the street in front of the tenant’s restaurant to be closed for the landlord’s own construction project. The Appeals Court revived the tenant’s claims for breach of the covenant of quiet enjoyment, breach of the implied covenant of good faith and fair dealing, and unfair business practices, and set aside a judgment for unpaid rent, but it agreed that the tenant’s fraud claims failed. This is a published decision of the Appeals Court and is binding statewide.
What happened
The landlord leased restaurant space in Harvard Square to the tenant. The lease required the tenant to run a high end, full service “destination restaurant” continuously and to maximize revenue, and it included an express covenant of quiet enjoyment. Before the lease was signed, the landlord told the tenant that its large building directly across the street would be renovated from 2016 through 2018. In March 2016, the landlord’s contractor got city permission to close the street to vehicle traffic during work hours, and the street stayed closed until the summer of 2018. The restaurant opened in the fall of 2016, paid two months’ rent, and closed in June 2017. The Superior Court granted summary judgment to the landlord on every claim and entered a money judgment for lost rent.
What the court decided
In Classic Restaurant Concepts, LLC v. President and Fellows of Harvard College, 104 Mass. App. Ct. 323 (2024), the court affirmed in part and vacated in part.
Fraud claims failed. The tenant offered no evidence that the landlord knew, before the lease was signed, how much the street would be closed.
The implied covenant claim goes to trial. Every contract carries an implied covenant that neither party will injure the other’s right to receive the benefits of the deal. Uno Restaurants, Inc. v. Boston Kenmore Realty Corp., 441 Mass. 376 (2004). The tenant was not asking the landlord to prevent all street closures. It claimed the landlord could not itself cause a closure that significantly impaired the tenant’s ability to run the restaurant the lease required. Knowing about the construction project in general did not mean the tenant agreed to the closure as it actually happened. The court also held that the covenant applies even when a lease has an integration clause.
The quiet enjoyment claim goes to trial. A landlord breaches this covenant when it deprives the tenant of a vital part of what the landlord knows the tenant needs to carry on its business. Charles E. Burt, Inc. v. Seven Grand Corp., 340 Mass. 124 (1959). That the restaurant was never completely cut off did not defeat the claim.
The unfair practices claim partly survives. To the extent the claim under G.L. c. 93A, § 11, rested on nondisclosure before the lease, it failed, because there is no liability for failing to disclose what a person does not know. Underwood v. Risman, 414 Mass. 96 (1993). But the claim based on later conduct needs a trial. There was evidence that the contractor told the landlord in early 2016 that the closure would be nearly every weekday for about two and a half years, that the landlord did not pass this on, and that it twice assured the tenant the street would reopen before school resumed that fall. The tenant said it wasted money on staff for a delayed opening.
The rent judgment was set aside. If the tenant proves a breach of quiet enjoyment, it may argue constructive eviction as a defense to rent. Even without a constructive eviction, a tenant may be able to end a commercial lease under the rule of mutually dependent covenants, which requires a lesser showing: that the landlord, after notice, failed to perform a promise that was a significant inducement to the lease. Wesson v. Leone Enters., Inc., 437 Mass. 708 (2002).
What this means for you
If your landlord seriously cuts off access to your business, an express quiet enjoyment clause and the implied covenant may protect you, even if you knew construction was coming when you signed. What the landlord tells you after you sign also matters.
This is not a final win for the tenant; the disputed facts still must be tried. The tenant here stopped paying rent and closed, and a money judgment for lost rent was entered against it before the appeal. Withholding rent or walking away from a commercial lease is risky unless you can prove a breach that justifies it.
What to do now
- Read your lease for a quiet enjoyment clause and any terms about construction, access or rent abatement.
- Put your concerns to the landlord in writing and ask it to fix the problem within a reasonable time.
- Keep records: dates of closures, photos, sales figures, customer complaints and every statement the landlord makes about how long the work will last.
- Get legal advice before you stop paying rent, leave the space or sign a lease amendment.
If this is your situation, call Doubleday Law at (617) 575-2006 or tell us what happened. These cases move on short deadlines.
