Legal Question in Real Estate Law in California
Lease Agreement
We signed a rental lease with an apartment complex for a 9 month duration. We broke the lease because we moved out early (with ~4 months remaining). A clause in the lease stated that we would be held financially responsible for the entire worth of the lease until our lease period was completed. If the apartment complex was able to re-lease the apartment to someone else, then we would be responsible for the differential between our monthly lease value and the new lease value (assuming the new lease was less, which it was by ~$150). My question is whether this practice is legal and do we have any recourse against the apartment complex?
2 Answers from Attorneys
Re: Lease Agreement
Yes, it certainly is legal. You signed a contract (the lease) which had provisions you knew would be triggered in the event of your breaching the contract, i.e., "breaking the lease"; if you did not want to be liable for the entire term of the lease, you should not have entered into the contract, or you should not have breached it once you did.
Re: Lease Agreement
Yes, this is legal, assuming the lower rent to the new tenant reflects true market conditions (which it very well may). The landlord's damages for breach of lease are limited to actual losses incurred despite reasonable attempts to mitigate. You may be lucky you weren't also dinged for advertising, tenant-screening, etc. costs. If rents were climbing instead of declining, you might have escaped liability altogether under the formula. Unfortunately, you picked the wrong time to abandon ship.
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