Legal Question in Real Estate Law in California
Leasing info. needed
My father-in-law entered a 3 year lease for his restraunt business. Unfortunately business was bad and he was forced to close after 1 year. Shortly after closing (a few months), the property owner re-leased the property to another client.
Is my father-in-law still responsible for the remaining 2 years or so on the lease?
If so, that means the owner has actually leased the property to 2 parties with only 1 party occupying it, that doesn't seem right!
Just a thought, if my in-law is responsible for the last 2 years, I think I have an idea.
I'll lease my house, become a real bad landlord causing the tenant to break the lease early. Become cordial again, and release the property, wow 2 incomes for the price of one!
6 Answers from Attorneys
Re: Leasing info. needed
The tenant under a lease is responsible for all rent damages incurred by the landlord. It does not matter if the landlord rents to 2 or 3 other people. What matters is whether the landlord could get the same rent from the new tenant. If so, the rent damages are those unpaid during the period from default to new tenancy. If the landlord made reasonable efforts to obtain another tenant, but rents for less than in the original lease, then the damages are the difference between what the landlord would have earned with your father and what the landlord is getting from the new tenant.
Re: Leasing info. needed
Your father-in-law is responsible for the full term of the lease. However, the landlord has a "duty to mitigate" his damages, meaning he must try to re-lease the space at market rates.
This means your father-in-law is responsible only for the landlord's actual damages: the lost rent while the space was empty (if father-in-law wasn't paying rent then), and the difference, if any, between your father-in-law's rate and the new tenant's rate for the term of father-in-law's lease, plus any costs the landlord incurred while trying to re-lease the space.
The idea is to put the landlord in the position he would have been in had your father-in-law stayed in the space and paid rent.
He will continue to be liable for the lease until the end of the lease term, but as long as the new tenant stays and pays good rent, father-in-law's actual responsibility for paying rent may be little or none.
Re: Leasing info. needed
Your father in law is only liable for the difference between what the new lease amount is and what his original lease amount is. If the landlord is now collecting more, there is no further liability.
P.S. - Don't try that as a landlord of residential property. Landlords who make things bad for their tenants give the tenants a reason to break the lease, legally.
Re: Leasing info. needed
He is not entitled to damages where he "mitigated" his damages by getting another renter.
Joel Selik
800-894-2889
www.4thelaw.com
Re: Leasing info. needed
If the lessor relet the property for the same or more money, then your father-in-law is credited with those sums, but is still "on the hook" to the extent of the term of the lease, in the event that the new tenant is paying less or defaults on his payments. The lessor is entitled to look to your father-in-law for any monies he goes unpaid for the balance of the lease period. With respect to your "idea", I wouldn't try it.
Re: Leasing info. needed
Everything is determined by the terms of the lease. Normally, if the lessor released the property, he has mitigated damges. If the new lease and old lease are similar, your in-law may not owe anything furtherlease. I would be happy to review any letters or lawsuit he received without charge if you fax them to me at 714 363 0229.