Legal Question in Business Law in California

Re: lease agreement

There are two possible answers to this question, and the first one has two possible results.

The first is that letting you out of your lease months early may amount to a re-write of the lease agreement. It is indeed possible to replace a written agreement with an oral agreement. Civil Code section 1698. If in fact you made an agreement with the landlord to let you out early, a judge would then want to know whether that replacement agreement made any mention of rent. If it did, the judge would order the parties to abide by that provision of the oral replacement agreement. If there was no discussion or agreement about rent, the judge would rule that the tenant's obligation to pay rent ended on the day he actually moved out and surrendered possession. That would govern the obligation to pay some additional rent or the right to a refund.

If, however, the facts show the discussion you had about moving out early didn't really amount to a so-called "novation," i.e., substitution of a new obligation for an existing one (Civil Code section 1530), the usual rules governing damages for breach of contract would apply, since your moving out early without being excused from your lease is a breach. (See Civil Code section 1531 stating that a novation is made "by the substitution of a new obligation between the same parties, with intent to extinguish the old obligation.") If the landlord lacked the intent to release you, you aren't released.

So, what do the "usual rules" have to say about the situation? Basically, that you are liable for the landlord's actual losses that could not have been prevented by mitigation measures. The landlord very successfully mitigated his losses, so his recoverable damages could be slight to nil. Whether you would be entitled to a half month's refund in a trial depends upon the establishment (or not) of additional facts bearing on damages, such as whether the new tenant is paying less rent. A reduction in monthly rent for 6.5 months could be a significant cause of damage that could wipe out your claim for 1/2 month's rent and could eat into your security deposit as well.