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.
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.