B-167550, SEP. 25, 1969

B-167550: Sep 25, 1969

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FAILURE OF LESSOR TO REPLACE DOORS IN LEASED POSTAL BUILDING THAT WAS CONSTRUCTED IN ACCORDANCE WITH PLANS APPROVED AND ACCEPTED BY POST OFFICE DEPARTMENT IS BREACH OF OBLIGATION TO MAINTAIN PREMISES IN TENANTABLE CONDITION FOR TERM OF LEASE. THEREFORE SINCE REPLACEMENT OF WORN DOORS WAS NECESSARY LESSOR MAY NOT HAVE AMOUNT WITHHELD FROM RENT PAID. TO ELIOT REALTY CORPORATION: REFERENCE IS MADE TO YOUR LETTER DATED JULY 10. YOU REQUEST COMPENSATION IN THE AMOUNT OF $610 ON THE BASIS THAT THE VESTIBULE DOORS WERE DAMAGED AS THE RESULT OF EXTRAORDINARY USAGE AND HANDLING BY POST OFFICE DEPARTMENT PERSONNEL. YOU STATE THAT YOU HAVE PROVIDED AN INSTALLATION IN ACCORDANCE WITH PLANS AND SPECIFICATIONS APPROVED AND ACCEPTED BY THE POST OFFICE DEPARTMENT PRIOR TO OCCUPANCY AND THAT YOU SHOULD NOT BE CHARGED WITH THE COST OF REPLACING THE VESTIBULE DOORS.

B-167550, SEP. 25, 1969

LEASES - REPAIRS - OBLIGATION DECISION TO ELIOT REALTY CORPORATION DENYING CLAIM FOR AMOUNT DEDUCTED FROM RENT FOR COSTS OF REPLACING DOORS IN LEASED BUILDING CONSTRUCTED FOR USE BY POST OFFICE. FAILURE OF LESSOR TO REPLACE DOORS IN LEASED POSTAL BUILDING THAT WAS CONSTRUCTED IN ACCORDANCE WITH PLANS APPROVED AND ACCEPTED BY POST OFFICE DEPARTMENT IS BREACH OF OBLIGATION TO MAINTAIN PREMISES IN TENANTABLE CONDITION FOR TERM OF LEASE, AND AN OBLIGATION SEPARABLE FROM THE CONSTRUCTION OBLIGATION. THEREFORE SINCE REPLACEMENT OF WORN DOORS WAS NECESSARY LESSOR MAY NOT HAVE AMOUNT WITHHELD FROM RENT PAID.

TO ELIOT REALTY CORPORATION:

REFERENCE IS MADE TO YOUR LETTER DATED JULY 10, 1969, PROTESTING AGAINST THE ACTION OF THE POST OFFICE DEPARTMENT IN WITHHOLDING THE COST OF INSTALLING NEW VESTIBULE DOORS AND A PAIR OF BAUMER HINGES AT THE ROSLINDALE POST OFFICE FROM THE RENTAL PAYMENTS DUE YOU FOR THE PREMISES. YOU REQUEST COMPENSATION IN THE AMOUNT OF $610 ON THE BASIS THAT THE VESTIBULE DOORS WERE DAMAGED AS THE RESULT OF EXTRAORDINARY USAGE AND HANDLING BY POST OFFICE DEPARTMENT PERSONNEL. YOU STATE THAT YOU HAVE PROVIDED AN INSTALLATION IN ACCORDANCE WITH PLANS AND SPECIFICATIONS APPROVED AND ACCEPTED BY THE POST OFFICE DEPARTMENT PRIOR TO OCCUPANCY AND THAT YOU SHOULD NOT BE CHARGED WITH THE COST OF REPLACING THE VESTIBULE DOORS.

THE RECORD MADE AVAILABLE TO OUR OFFICE STATES THAT ON JUNE 1, 1962, A LEASE WAS EXECUTED BY AND BETWEEN THE POST OFFICE DEPARTMENT AND THE ELIOT REALTY CORPORATION AS LESSOR. THE LEASE PROVIDES FOR THE OCCUPANCY OF CERTAIN PREMISES LOCATED IN BOSTON, MASSACHUSETTS, ROSLINDALE STATION, AT AN ANNUAL RENTAL OF $16,200 FOR A PERIOD OF TWENTY YEARS. THE LEASE FURTHER PROVIDES FOR FIVE, FIVE-YEAR RENEWALS AT THE OPTION OF THE GOVERNMENT, AT AN ANNUAL RENTAL OF $15,000. THE PREMISES IN QUESTION ARE USED AS A FULL POSTAL FACILITY WHICH INCLUDES HANDLING PARCEL POST.

THE RECORD INDICATES THAT BY LETTER DATED OCTOBER 26, 1964, AND SUBSEQUENT CORRESPONDENCE, AS WELL AS SEVERAL TELEPHONE CONVERSATIONS, YOU WERE ADVISED THAT THE VESTIBULE DOORS WERE IN NEED OF REPAIR AND THAT YOU WERE REQUIRED UNDER THE PROVISIONS OF THE LEASE TO MAKE THE NECESSARY REPAIRS. BY LETTER DATED APRIL 20, 1965, AND SUBSEQUENT CORRESPONDENCE, YOU TOOK EXCEPTION TO THE DEPARTMENT'S POSITION WITH REGARD TO LESSOR RESPONSIBILITY FOR REPAIRING THE VESTIBULE DOORS. AS A RESULT OF YOUR REFUSAL TO REPAIR THE VESTIBULE DOORS, AS REQUESTED, A CONTRACT FOR THE NECESSARY REPAIRS WAS AWARDED THROUGH COMPETITIVE BIDDING TO A THIRD PARTY, AT A COST OF $610. THE DEPARTMENT DEDUCTED THIS COST FROM A RENTAL PAYMENT DUE YOU UNDER THE LEASE AND YOU WERE ADVISED OF THE DEDUCTION.

IN A LETTER DATED JUNE 14, 1968, TO MR. H. J. O-MALLEY, CHIEF, REAL ESTATE BRANCH, POST OFFICE DEPARTMENT, BOSTON REGIONAL OFFICE, YOU STATED THAT "THE OPERATIONS AND APPARENT NEGLIGENCE OF THE LESSEE CONTRIBUTED TO DAMAGING THE ORIGINAL VESTIBULE DOOR INSTALLATION FOR WHICH THE LESSEE MUST ASSUME RESPONSIBILITY.' THE QUESTION RAISED IS WHETHER UNDER THE CIRCUMSTANCES YOU WERE UNDER A CONTRACTUAL OBLIGATION TO MAINTAIN THE VESTIBULE DOORS AND THEREFORE REPLACE THEM IF THE NECESSITY AROSE. THE RELEVANT PORTIONS OF THE LEASE ARE AS FOLLOWS: "PARAGRAPH 6: THE LESSOR SHALL FURNISH TO THE GOVERNMENT, UNDER THE TERMS OF THIS LEASE, AS PART OF THE RENTAL CONSIDERATION, THE FOLLOWING * * * SHALL PROPERLY PROTECT ALL WINDOWS AND DOORS ACCORDING TO REQUIREMENTS.'PARAGRAPH : THE LESSOR SHALL, UNLESS HEREIN SPECIFIED TO THE CONTRARY, MAINTAIN THE DEMISED PREMISES, INCLUDING THE BUILDING AND ANY AND ALL EQUIPMENT, FIXTURES, AND APPURTENANCES, WHETHER SEVERABLE OR NON-SEVERABLE, FURNISHED BY THE LESSOR UNDER THIS LEASE IN GOOD REPAIR AND TENANTABLE CONDITION, EXCEPT IN CASE OF DAMAGE ARISING FROM THE ACT OR THE NEGLIGENCE OF THE GOVERNMENT'S AGENTS OR EMPLOYEES. FOR THE PURPOSE OF SO MAINTAINING SAID PREMISES AND PROPERTY, THE LESSOR MAY AT REASONABLE TIMES ENTER AND INSPECT THE SAME AND MAKE ANY NECESSARY REPAIRS THERETO.'PARAGRAPH 10 (C): IF ANY BUILDING OR ANY PART OF IT ON THE LEASED PROPERTY BECOMES UNFIT FOR USE FOR THE PURPOSES LEASED, THE LESSOR SHALL PUT THE SAME IN A SATISFACTORY CONDITION, AS DETERMINED BY THE POST OFFICE DEPARTMENT, FOR THE PURPOSES LEASED. IF THE LESSOR DOES NOT DO SO WITH REASONABLE DILIGENCE, THE POST OFFICE DEPARTMENT IN ITS DISCRETION MAY CANCEL THE LEASE. FOR ANY PERIOD SAID BUILDING OR ANY PART THEREOF IS UNFIT FOR THE PURPOSES LEASED, THE RENT SHALL BE ABATED IN PROPORTION TO THE AREA DETERMINED BY THE POST OFFICE DEPARTMENT BY REASON OF SUCH CONDITION.'

UNDER THE TERMS OF THE LEASE, THE LESSOR WAS REQUIRED TO MAINTAIN THE VESTIBULE DOORS EXCEPT IN THE CASE OF DAMAGE ARISING FROM THE ACT OR THE NEGLIGENCE OF THE GOVERNMENT'S AGENTS OR EMPLOYEES. IN A LETTER TO YOU DATED MAY 27, 1968, THE POST OFFICE DEPARTMENT ADVISED THAT THE BROKEN HINGE AND DOOR IN THE REAR VESTIBULE IS THE RESULT OF NORMAL WEAR AND TEAR AND DID NOT RESULT FROM ABUSE OR CARELESSNESS OF EMPLOYEES. ALTHOUGH YOU CONTEND THAT THE OPERATIONS AND APPARENT NEGLIGENCE OF THE LESSEE CONTRIBUTED TO THE DAMAGING OF THE ORIGINAL VESTIBULE DOOR INSTALLATION, THERE IS NO AFFIRMATIVE SHOWING OF FACTS UPON WHICH TO BASE A CONCLUSION THAT THE DAMAGES WERE CAUSED BY CARELESSNESS OR NEGLIGENCE RATHER THAN BEING DUE TO ORDINARY WEAR AND TEAR. THE POST OFFICE DEPARTMENT HAS ADVISED THAT THE HANDLING OF PARCEL POST REQUIRES THE USE OF HEAVY "NUTTING" TRUCKS AND EQUIPMENT AND A CERTAIN AMOUNT OF DAMAGE MUST BE EXPECTED TO RESULT FROM THE USE OF A BUILDING AND ITS DOORS IN CONNECTION WITH A POSTAL STATION. OUR OFFICE HAS HELD THAT IN THE ABSENCE OF A SPECIFIC AGREEMENT TO BE SO LIABLE, A TENANT IS NOT LIABLE FOR DAMAGES OR DETERIORATION OF THE LEASED PROPERTY RESULTING FROM ORDINARY WEAR AND TEAR IN THE USE OF THE PROPERTY FOR THE PURPOSE FOR WHICH IT WAS LEASED. COMP. GEN. 585, 587. IN OUR DECISION REPORTED IN 18 COMP. GEN. 8, 9, WE STATED THAT: "IN TAYLOR V CAMPBELL (108 N.Y. SUPP. 401), IT WAS HELD THAT WHATEVER DEPRECIATION OCCURS WHILE THE TENANT DOES BY HIS AFFIRMATIVE ACTS NOTHING INCONSISTENT WITH THE USUAL USE, OR DOES NOT OMIT TO DO ACTS WHICH IT IS USUAL FOR THE TENANT TO PERFORM, IS DUE TO ORDINARY REASONABLE USE AND WEAR * * *. THE GOVERNMENT HAVING USED THE PREMISES ONLY FOR THE PURPOSE FOR WHICH THEY WERE RENTED SUCH DAMAGES AS RESULTED WERE DUE ONLY TO WEAR AND TEAR CONTEMPLATED IN THE LEASE.' 18 COMP. GEN. 8, 10.

IN A DECISION REPORTED IN 5 COMP. GEN. 299, WE HELD THAT THE COST OF REPLACING A DOOR TO A GARAGE OCCUPIED BY THE POSTAL SERVICE UNDER A LEASE AGREEMENT, WHERE THE DOOR HAD BEEN DAMAGED BY A POST OFFICE TRUCK WITHOUT NEGLIGENCE ON THE PART OF THE DRIVER, IS NOT PAYABLE FROM PUBLIC FUNDS WHEN A PROVISION IN THE LEASE REQUIRED THE LESSOR TO MAKE ALL REPAIRS WITHOUT EXCEPTION.

THE PRESENT SITUATION IS SIMILAR TO THE TWO CASES OF UNITED STATES POST OFFICES CORPORATION V UNITED STATES, 77 CT. CL. 173 (1934) AND 80 ID. 785 (1935), WHICH CONCERN THE RIGHTS OF THE GOVERNMENT AS A TENANT WHEN THE LESSOR FAILS TO COMPLY WITH THE TERMS OF A LEASE REQUIRING THE LESSOR TO MAINTAIN THE LEASED PREMISES IN A FIT CONDITION. IN THE UNITED STATES POST OFFICES CORPORATION CASES, THE BUILDINGS LEASED BY THE GOVERNMENT WERE POSTAL FACILITIES WHICH HAD BEEN CONSTRUCTED, AS IN THIS CASE, IN ACCORDANCE WITH PLANS AND SPECIFICATIONS FURNISHED BY THE GOVERNMENT. THE LEASES WHICH WERE EXECUTED BY THE OWNER-BUILDERS AND THE GOVERNMENT REQUIRED THE LESSORS, AMONG OTHER THINGS, TO FURNISH SATISFACTORY LIGHTING FIXTURES AND SATISFACTORY PLUMBING AND NECESSARY TOILET FACILITIES. LONG AFTER THE GOVERNMENT ENTERED INTO OCCUPANCY OF THE BUILDINGS, AND AS THE RESULT OF ADDITIONAL NEEDS NOT EXISTING AT THE COMMENCEMENT OF THE LEASE TERMS, THE LESSOR IN ONE CASE WAS REQUESTED BY THE GOVERNMENT TO FURNISH ADDITIONAL LIGHTING FIXTURES, AND IN THE OTHER CASE TO FURNISH ADDITIONAL TOILET FACILITIES. IN BOTH CASES THE LESSOR REFUSED TO COMPLY WITH THE GOVERNMENT'S REQUEST, ON THE GROUND THAT THE BUILDINGS HAD BEEN COMPLETED AND ACCEPTED BY THE GOVERNMENT IN FULL COMPLIANCE WITH THE ORIGINAL AGREEMENT. THE GOVERNMENT THEREFORE PROCEEDED TO HAVE THE NECESSARY EQUIPMENT INSTALLED AND DEDUCTED THE EXPENSES FROM THE RENTAL PAYMENTS DUE THE LESSORS. IN DENYING THE CLAIMS OF THE LESSORS FOR REFUND OF THE RENTAL PAYMENTS SO WITHHELD BY THE GOVERNMENT, THE COURT POINTED OUT THAT THERE WERE TWO SEPARATE CONTRACTS BETWEEN THE PARTIES, THE AGREEMENT TO LEASE AND THE LEASE ITSELF; THAT IT WAS UNDER THE SECOND CONTRACT THAT THE GOVERNMENT'S RIGHTS AROSE; AND THAT THE FIRST CONTRACT DID NOT FIX THE TERMS OF THE LEASE. IN THE EARLIER DECISION, THE COURT MADE THE FOLLOWING PERTINENT STATEMENTS:

"THE PLAINTIFF UPON THE RECORD MAY NOT RELIEVE ITSELF OF ITS ASSUMED OBLIGATIONS UNDER A TEN-YEAR LEASE BY A CONTENTION THAT THE PLANS AND SPECIFICATIONS FOR A BUILDING TO BE LEASED DETERMINE THE RELATIONSHIP OF LANDLORD AND TENANT UNDER THE SEPARATE LEASE. THE MERE FACT THAT THE PLANS AND SPECIFICATIONS DEALT EXPRESSLY WITH THE SAME SUBJECT MATTER IN SOME RESPECTS IS NOT DETERMINABLE OF THE ISSUE. IN THE FIRST INSTANCE THE LIGHTING SYSTEM WAS A CONSTRUCTIONAL DETAIL. IN THE SECOND PLACE, IT WAS A MATTER OF MEETING SATISFACTORILY THE NECESSITIES OF THE TENANT WITH RESPECT TO LIGHTING DURING THE TENANCY.

"THE PLAINTIFF WAS AWARE THAT IT WAS LEASING A COMPLETED BUILDING FOR A POST OFFICE, A BRANCH OF GOVERNMENTAL ACTIVITY THAT EXACTS ITS OWN PECULIAR ACCOMMODATIONS, SUBJECT TO ALTERATION AND CHANGE WITH THE CORRESPONDING FLUCTUATIONS IN THE PUBLIC SERVICE FURNISHED. PARAGRAPH 6 ANTICIPATED IN PART AT LEAST THE HAPPENING OF SUCH EVENTS, AND WAS MADE A PART OF THE LEASE FOR THAT ESPECIAL PURPOSE. THE LEASE WAS DULY SIGNED BY THE PLAINTIFF AND NO COMPLAINT IS NOW MADE AS TO ANY PART OF THE TRANSACTION, SAVE THAT IT WAS NOT CHARGEABLE WITH THE AMOUNT EXPENDED.'

THE SECOND DECISION, WHICH QUOTED EXCERPTS FROM THE FIRST DECISION, SPECIFICALLY POINTED OUT THAT THE LESSOR'S OBLIGATION UNDER THE LEASE TO FURNISH SATISFACTORY PLUMBING AND NECESSARY TOILET FACILITIES WAS A CONTINUING ONE THROUGHOUT THE PERIOD OF THE LEASE. ACCORDINGLY, AS IN ITS EARLIER DECISION, THE COURT UPHELD THE RIGHT OF THE GOVERNMENT TO WITHHOLD FROM THE RENTAL PAYMENTS THE EXPENSES INVOLVED IN FURNISHING ADDITIONAL FACILITIES.

WE HAVE FOLLOWED THE PRINCIPLES STATED IN THE ABOVE CASES (SEE 15 COMP. GEN. 1064 AND 45 COMP. GEN. 617) AND CAN FIND NO BASIS FOR DISTINGUISHING THE PRESENT CASE. THE FACT THAT YOU HAD PROVIDED AN INSTALLATION IN ACCORDANCE WITH PLANS AND SPECIFICATIONS APPROVED AND ACCEPTED BY THE POST OFFICE DEPARTMENT DID NOT AFFECT YOUR OBLIGATIONS UNDER THE LEASE TO MAINTAIN THE PREMISES IN TENANTABLE CONDITION, AND YOUR FAILURE TO REPLACE THE VESTIBULE DOORS MUST BE REGARDED AS A BREACH OF THAT OBLIGATION. SINCE THE LEASE REQUIRED YOU NOT ONLY TO MAINTAIN THE PROPERTY IN TENANTABLE CONDITION FOR THE TERM OF THE GOVERNMENT'S OCCUPANCY BUT ALSO TO RESTORE IT TO SATISFACTORY CONDITION WITH DUE DILIGENCE IN THE EVENT IT BECAME UNFIT IN WHOLE OR IN PART FOR USE FOR THE PURPOSES LEASED, WE MUST CONCUR WITH THE VIEW OF THE POST OFFICE DEPARTMENT, WHICH IS SUPPORTED BY THE COURT CASES AND DECISIONS OF OUR OFFICE CITED ABOVE, THAT YOU BORE A SEPARATE AND CONTINUING RESPONSIBILITY UNDER THE LEASE TO MAINTAIN THE VESTIBULE DOORS FOR THE TERM OF THE LEASE.

FOR THE REASONS STATED ABOVE, YOUR CLAIM FOR THE AMOUNT OF RENT WITHHELD BY THE POST OFFICE DEPARTMENT MUST BE DENIED.