Also known as: relet for tenant's account · reletting on tenant's account · relet on tenant's account · reletting · tenant account relet
Written by attorneys — see sources below.
A landlord remedy under which the landlord relets abandoned premises as the tenant's agent. The landlord must notify the tenant of the election to relet for the tenant's account. This election relieves the tenant of future liabilities under the lease to the extent the new tenancy performs the obligations on reasonable terms.
Roberto Reyes abandoned his storefront after six months. The landlord notified Reyes in writing that it would relet the space for Reyes's account. The landlord found a new tenant at the same rent within two months. Reyes owes only the accrued rent through the date of reletting.
Rowan Russell vacated a warehouse and stopped paying rent. The landlord relet the space for Russell's account at a lower monthly rate. Russell remains liable for the rent differential between the original and new leases plus any accrued amounts before the new tenancy began.
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 caseThe landlord must notify the tenant that it will relet the premises for the tenant's account. This election limits the tenant's future liability to the extent the new lease performs the obligations on reasonable terms.
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No. The original lease remains in effect. The tenant's liability continues for any shortfall in rent and for obligations that accrued before the new tenancy begins.
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The landlord recovers rent due before the new tenant took possession plus any difference if the new rent is lower. The tenant is relieved only to the extent the new lease performs the obligations.
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…could only recover, in the event of the lessee's breach, that amount of damages which the lessor could not reasonably avoid by reletting the premises. Since the statutory scheme would be frustrated if the lessor could first contract to shift the duty of mitigation onto the lessee and then block the lessee's attempts to…