Ethel Javins rents a one-bedroom apartment from Metro Rental. She signs a written lease for a one-year tenancy, with a monthly payment of $800. The lease states that the tenant has inspected the leased premises and takes them “as is.” When Javins moves in, she discovers that the bathroom toilet is clogged with paper and waste and will flush only by dumping pails of water into it. Moreover, windows in the kitchen and bedroom are broken, and there is no lock on the front door. The bathroom light and wall outlet don’t work. Water leaks from the water pipes of the apartment upstairs. In the bedroom, sections of plaster dangle dangerously from the ceiling. She pleads with Metro Rental to make repairs, but despite repeated promises, no repairs are ever made. Javins consults a lawyer and brings legal action against Metro. Should the court enforce the lease as written or recognize that, regardless of what the parties have agreed, tenants have a right to live in dwellings that do not pose a danger to their health and safety?

In the modern regulatory state, the government frequently acts in ways designed to shift resources from the wealthier to the poorer segments of their societies. This is true not only in the social welfare states of Europe but also in the United States, where state-supported welfare programs traditionally have been less robust. Modern capitalism has become synonymous with redistributive state interventions coexisting with a background market economy. Virtually every jurisdiction in the United States, for example, recognizes an “implied warranty of habitability” in residential leases. Even when a tenant signs a lease that expressly provides for the apartment to be rented “as is,” courts will disregard the agreement and require landlords like Metro to repair the apartment up to minimum habitable standards and, in the meantime, will excuse tenants like Javins from paying rent.