Daily Development for Friday, December 12, 2003 by: Patrick A. Randolph, Jr. Elmer F. Pierson Professor of Law UMKC School of Law Of Counsel: Blackwell Sanders Peper Martin Kansas City, Missouri dirt@umkc.edu LANDLORD/TENANT; LANDLORD'S REMEDIES; COLLECTION OF RENT; MITIGATION REQUIREMENT: Where tenant fails to perform on lease, and even fails to take possession, landlord nonetheless has the right to leave the premises vacant and sue for the rent accrued within period measured by statute of limitations. Holiday Furniture Factory Outlet Corp. v. State of Florida,a Dept. Of Corrections, 852 S. 2d 926 (Fla. App. 2003) Landlord and tenant entered into a written five year lease. Before the time for possession had even commenced, however, tenant, a state agency announced that it was rejecting the lease and would not take possession. Landlord left the premises empty and made no attempt to relet. More than five years later, after the term of the lease had run, landlord sued tenant for back rent accumulated during the preceding five year period (the statute of limitations on such claims in Florida.) Tenant argued that the landlord had never made necessary improvements to the property, and thus had not performed its end of the bargain. But landlord countered that it had either performed or was prevented from performing the improvements by tenant's actions. The trial court concluded that as landlord had argued that it had satisfied its preconditions to tenant liability on the lease (to the extent it could do so) as of March, 1995, it was obligated to bring suit for breach of the lease within five years of that date. The Florida Court of Appeals reversed, pointing out that this was not a suit for damages for breach of lease but for rent on a lease that had never been terminated. Although the landlord could not collect every penny of the rent, since the claims for the first few months arose beyond the five year limitations period, the landlord was permitted to reach back five years. Comment 1: Usually the landlord has a concern that a defaulting tenant will be "judgment proof" or unavailable for suit, and wouldn't wait so long to sue. But here the State of Florida was the defendant, so the landlord had some confidence the tenant would still be there to sue. Comment 2: Many lawyers, and even more law professors, believe that the "mitigation of damages" requirement has pretty much displaced the landlord's right to leave the premises vacant and sue for the rent. In fact, in a recent survey the author did in connection with the redraft of Friedman on Leases, the author identified a relatively even split on this issue with regard to commercial leases, although in residential leases the majority of states favors the mitigation doctrine, in part because it is included in the widely adopted Uniform Residential Landlord Tenant Act. Comment 3: What makes this case particularly interesting is that the case makes no differentiation based upon the fact that the tenant had not yet taken possession when it announced that it would not perform. In England and a few American states, the courts differentiate between a formal lease and a "contract to lease." In the latter case, a breach leads only to traditional contract damages, as to which a duty to mitigate always applies. 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