Brief Fact Summary. Two parties enter into a lease, but the tenant decided not to occupy the premises and attempted to break the lease.
Synopsis of Rule of Law. In a residential lease, a landlord has a duty to mitigate damages when he seeks to recover past due rent from a defaulting tenant.
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. In a residential lease, does a landlord have to duty to mitigate damages when the tenant defaults on payment?
Held. Yes. Judgment affirmed.
The state has a rule that states a landlord has no duty to mitigate damages caused by a defaulting tenant. But, courts have the tendency in interpreting leases and other contracts to focus on the intention of the parties.
When a breach occurs in a multi-dwelling building, each apartment may have unique qualities that make it attractive. Here, there was a specific request to rent the apartment vacated by Defendant. There is no reason to believe that absent this vacancy, Plaintiff could have rented a different apartment to the third party.
Modern notions of fairness and equity must now govern. A landlord has a duty to mitigate damages where he seeks to recover rents due from a defaulting tenant.
If the landlord has other vacant apartments besides the defaulting tenant’s, his duty to mitigate consists of making reasonable efforts to re-lease the unit. He must treat the apartment as one of his vacant stock.
This case shows the unfairness that can happen when a landlord has no duty to mitigate. Plaintiff could have avoided the damages, which accrued by finding a suitable tenant, and so defendant was relieved of his duty to continue to pay rent.
Discussion. A landlord’s duty to mitigate a residential by trying to find a new tenant is a matter of fairness. The landlord cannot sit on a vacant, abandoned apartment and then expect to recover the full rent from the defaulting tenant.