CaseCast™ – "What you need to know"
Brief Fact Summary. Landlord sues for rent for the entire period of the lease when tenant vacated apartment prior to expiration of the lease.
Synopsis of Rule of Law. A landlord has a duty to mitigate damages by attempting to re-let an apartment vacated by a tenant at fair market value.
It is well settled that a party claiming damages for breach of contract has a duty to mitigate his loss.View Full Point of Law
Issue. Whether a landlord seeking damages from a defaulting tenant has a duty to mitigate damages by making reasonable efforts to re-let an apartment wrongfully vacated by a tenant.
Held. Reversed, a landlord does have an obligation to make a reasonable effort to mitigate damages in this situation for the following reasons:
Application of the contract rule requiring mitigation of damages to a residential lease is justified as a matter of basic fairness. If the landlord has other vacant apartments besides the one which the tenant abandoned, he has a duty to make reasonable efforts to attempt to re-let the apartment and treat it as one of the vacant stock.
To assess whether the landlord made reasonable efforts to mitigate, the court should consider whether the landlord offered/showed the vacant apartment, advertisements, among other factors.
The landlord need not accept less than fair market value rent or substantially alter his obligations as established by the pre-existing lease.
Discussion. The court overruled precedent based on the theory that when the landlord signed the lease with a tenant, the landlord may not interfere with the estate granted to the tenant by the lease. The court noted that a lease for residential property could no longer be distinguished from an ordinary contract and thus was subject to the contract rule requiring mitigation of damages.