Citation. 74 N.J. 446, 378 A.2d 767 (1977)
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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.
The Defendant, Kridel (Defendant) signed a two-year lease for an apartment owned by the Plaintiff, Sommer (Plaintiff). The Defendant paid the security deposit and first month’s rent. Prior to even obtaining the keys to the apartment, the Defendant broke off his engagement, became a student and attempted to terminate the lease by letter to the Plaintiff. The Plaintiff did not attempt to re-let the apartment until months later. Plaintiff sued the Defendant for the full amount due under the two-year lease. The trial court found that the Plaintiff had a duty to mitigate by attempting to re-let the premises. The appellate court reversed and the Defendant appealed.
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.
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.
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.