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Holmes (D) rented a residence on an oral month to month lease from Pugh (P). The rent was $60 per month, and P sought to recover unpaid rent for a number of months in 1975 and 1976. D asserted the defense that D breached the implied warranty of habitability and filed counterclaims for the cost of repairing defective conditions for which P had been given notice but failed to fix. The trial court ruled for P in that D failed to set forth a legal defense to P's actions for back rent and possession of the premises. D appealed. The Superior court reversed and remanded in that caveat emptor was no longer proper for residential leases and that there was an implied warranty of habitability. P appealed.

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