Also known as: relet on the tenant's account · re-letting on tenant's account · relet on tenant account · reletting · re-let
Written by attorneys — see sources below.
A landlord remedy by which the landlord, after notice to an abandoning tenant, relets the premises for the tenant's account. The action reduces the tenant's liability for future rent to the extent the new lease is performed on reasonable terms.
Ryan Roberts abandoned his storefront lease with Riverfront Developments after six months. Riverfront sent written notice that it would relet the space on Roberts's account. When a new tenant took the premises at a reasonable rent, Roberts's obligation for future rent ended to the extent the new lease performed.
Renata Russo vacated her apartment mid-lease. The landlord located a replacement tenant after reasonable marketing efforts and credited Russo with the new rent received. Russo remained liable only for the gap between the original rent and the reasonable amount collected from the replacement.
On March 10, 1972, defendant James Kridel entered into a lease with plaintiff Abraham Sommer for apartment 6-L in the Pierre Apartments in Hackensack for a term from May 1, 1972 until April 30, 1974, with a rent concession for the first six weeks. Kridel paid Sommer $690, with half satisfying the first month's rent and the remainder as a security deposit. On May 19, 1972, Kridel wrote to Sommer stating that his engagement had been broken, he had no funds of his own as a student supported by his stepfather, and he was surrendering all rights to the apartment while forfeiting the two months' rent already paid. Sommer did not answer Kridel's letter. A third party inquired about renting apartment 6-L but was told that the apartment was not being shown since it was already rented to Kridel. Sommer did not re-enter the apartment or exhibit it to anyone until August 1, 1973, at which time it was rented to a new tenant for a term beginning September 1, 1973. In August 1972, Sommer sued Kridel demanding the total amount due for the full two-year term of the lease. Following a mistrial, Sommer filed an amended complaint seeking the amount due between May 1, 1972 and September 1, 1973. The trial judge ruled in favor of Kridel, the Appellate Division reversed, and the Supreme Court granted certification. On December 27, 1972, Carlos Perosio entered into a lease with Riverview Realty Co. for apartment 5-G at 2175 Hudson Terrace in Fort Lee for a two-year term from February 1, 1973 until January 31, 1975 at a monthly rental of $450. Perosio occupied the apartment until February 1974, after which he vacated the premises having paid rent through January 31, 1974. Riverview Realty filed a complaint on October 31, 1974 demanding payment for the monthly rental from February 1, 1974 through October 31, 1974. The trial court granted the landlord’s motion for summary judgment against the defendant. The Appellate Division affirmed the trial court. The Supreme Court granted certification.
View caseRoger Ramirez abandoned commercial space leased from Ridgeway Partners. The landlord relet the premises on Ramirez's account but at a below-market rate without justification. Ramirez successfully limited his liability to the difference that would have existed under reasonable rental terms.
In 1970, the Perlitches entered into a 25-year sublease with Robert Bixler for 14,400 square feet of hangar space at the San Jose Municipal Airport to conduct an airplane maintenance business. The sublease covered an original five-year term plus four five-year options to renew. The rental rate was to be increased every ten years in the same proportion as rents increased on the master lease from the City of San Jose. The premises were to be used by Bixler for the purpose of conducting an airplane maintenance business. The lease provided that written consent of the lessor was required before the lessee could assign his interest, and that failure to obtain such consent rendered the lease voidable at the option of the lessor. Subsequently, the Perlitches assigned their interest to Ernest Pestana, Inc. In 1981, Bixler agreed to sell the business, equipment, inventory, improvements, and the existing lease to Jack Kendall, Grady O'Hara, and Vicki O'Hara. The proposed assignees had a stronger financial statement and greater net worth than Bixler and were willing to be bound by the lease terms. Bixler requested consent from Ernest Pestana, Inc., but the lessor refused, claiming an absolute right to withhold consent arbitrarily and demanding increased rent and other more onerous terms as a condition of consent. The proposed assignees filed suit for declaratory and injunctive relief and damages, alleging that the refusal was unreasonable. The trial court sustained the demurrer without leave to amend. The Court of Appeal affirmed.
View caseRoland Rhodes left his restaurant premises before lease end. The landlord chose to relet on Rhodes's account rather than accept surrender. After securing a new tenant on reasonable terms, the landlord recovered only the shortfall from Rhodes while the new lease performed.
In November 1970, Wiley Enterprises, Inc. and Rodney A. Wiley executed a written lease agreement with the predecessor in interest of A Family Affair Restaurant, Inc., letting land and a building in Osseo, Minnesota, for use as a restaurant for a five-year term beginning December 1, 1970. The lease required the tenant to bear all costs of repairs and remodeling, to make no changes in the building structure without prior written authorization, and to operate the restaurant in a lawful and prudent manner, while reserving to the lessor the right to retake possession should the lessee fail to meet the lease conditions. In early 1971, Kathleen Berg took assignment of the lease, and on May 1, 1971, she opened A Family Affair Restaurant on the premises; in January 1973, Berg incorporated the restaurant and assigned her interest to A Family Affair Restaurant, Inc., continuing to act as sole shareholder for the tenant. Strained relations developed over Berg's remodeling without written permission and alleged health code violations, leading Wiley's attorney to send a June 29, 1973 letter charging breaches and demanding completion of eight remodeling items by July 13, 1973, or Wiley would retake possession, while a June 13 inspection by the Minnesota Department of Health produced an order for changes to be completed by July 15, 1973. On July 13, 1973, Berg closed the restaurant at the end of business, dismissed employees, and placed a sign saying "Closed for Remodeling"; that day Wiley attempted to change the locks but left after Berg asserted her right to possession, and later that evening Wiley was observed peering into the window and pounding on the back door, leading to police mediation and an agreement to preserve the status quo until July 16. On July 16, 1973, Wiley, accompanied by a police officer and a locksmith, entered the premises in Berg's absence and changed the locks; Berg found herself locked out later that day, the premises were re-let to another tenant on or about August 1, 1973, and Berg brought a damage action against Wiley on July 27, 1973, seeking damages for wrongful eviction among other claims, after which the jury found Berg had neither abandoned nor surrendered the premises and awarded her damages for lost profits and loss of chattels while the trial court found the lockout wrongful as a matter of law.
View caseThe landlord must notify the tenant that it will undertake to relet the leased property for the tenant's account. This notice relieves the tenant of future liabilities to the extent the new lease is performed on reasonable terms.
Supporting sources
The landlord has no duty to relet to mitigate the tenant's liability. The landlord may instead accept surrender or simply leave the premises vacant while pursuing accrued rent.
Supporting sources
Damages equal the difference between the rent the original tenant agreed to pay and the rent received from the replacement tenant, plus reasonable costs of finding the new tenant and any lost rent during the search period.
…If the tenant defaulted, the lease gave the landlord the option of re-entering or re-letting, but stipulated that failure to re-let or to recover the full rental would not discharge the tenant’s liability for rent. : The trial court noted that damages had been erroneously calculated in the complaint to reflect…