Duties of Landlord to Mitigate Breach of Lease

Tenancy agreement with key for lease and housing

When a residential tenant violates his lease agreement and vacates the premises prior to the end of the lease term without legal justification, the landlord has both remedies and obligations under California law. Specifically, the landlord is required to mitigate damages incurred by the tenant’s breach, regardless of the reason the tenant vacated the premises. This imparts the obligation to exert reasonable efforts to find a replacement tenant in order to prevent excess damages to be incurred by the breaching tenant.

The obligation to mitigate damages is rooted in the public policy determination that the landlord should not unfairly recover damages which could be avoided through exercising reasonable diligence. Thus, the landlord is not entitled to wait for the expiration of the lease term in the absence of mitigating action and recover damages based on the full term remaining on the lease. If the vacating tenant produces a tenant who meets the landlord’s criteria, the landlord is legally obligated to rent the premises to him.

The courts have established that they will evaluate the reasonableness of the efforts exercised by the landlord at the time the loss was incurred and in view of the circumstances that existed then. But what constitutes a reasonable effort to locate a new tenant and how can a landlord properly fulfill this obligation? First, the landlord is not required to devote all, or substantially all, of his attention toward finding a new tenant to the exclusion of his other affairs. This qualification relates to the criteria that the effort exercised by the landlord must be “reasonable” in nature. Second, the landlord is not obligated to modify his criteria for potential lessees. Thus, the landlord need not agree to accept a tenant with questionable financials in order to rent the property hastily. Last, the landlord does not need to rent the property at a financial loss in order to attract a tenant or fill the vacancy quickly; the unit should be offered and leased at its fair market value.

If the landlord cannot locate a new tenant after exercising reasonable efforts, which the court may determine upon analyzing the facts, then the breaching tenant will be liable for the amount corresponding to the remainder of the lease term.

Contact Shane Coons at 949-333-0900 or visit his website at www.ShaneCoonsLaw.com to find out more about his practice.

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Duties of Landlord to Mitigate Breach of Lease

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