Daily Development for Wednesday, September 28,
2005
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; DAMAGES; DUTY TO MITIGATE: Landlord satisfies duty to mitigate by offering premises for sale through a broker at price premises has rented for during rentals over the previous seven years. There is no requirement that landlord offer premises for lease at any price.
Thomas & Kline Realty Co. v. George Rogers, Court of Appeals No. L-04-1361, 2005 Ohio 4876; 2005 Ohio App. LEXIS 4423 (9/2/05)
Tenant left the leased office premises and stopped paying rent four months before the end of the lease term, sending landlord a letter that he was vacating prematurely. Landlord listed the premises with a reputable broker, and indeed it was shown to several prospective tenants, but not rented until after the lease had expired. Landlord sued for the four months unpaid rent, and tenant objected on the grounds that landlord should have leased the premises for whatever they would bring, instead of setting a rent at the price for which the premises had been renting over the prior seven years.
As the caption indicates, the court didn’t buy tenant’s argument. It noted that the controlling Ohio Supreme Court authority, although it had not discussed the price element of a mitigation, had noted that landlord has no obligation to rent to “just any old tenant.” Consequently, the landlord behaved properly in offering the premises for rent at a reasonable price based upon the historical market.
Comment 1: Sometimes these cases are about something other than what the appellate decision reveals. Tenant’s proposition on its face seems absurd: why should the landlord, presumably looking for a longer term than four months, be required offer the premises at a bargain price just to protect the defaulting tenant?
Comment 2: At the same time, there’s a lesson here. Well advised landlord will put into the lease language protecting specifically their reasonable business decisions when acting to mitigate. The language should state expressly what the landlords are able to do (without limitation) in terms of new term, combination with other space, limitations on use and other matters, and, of course rent. Courts normally will uphold such language if at all reasonable, and the landlord won’t be faced with nit picking appeals.
Items reported here and in the ABA publications
are for general information purposes only and
should not be relied upon in the course of
representation or in the forming of decisions
in
legal matters. The same is true of
all
commentary provided by contributors to the
DIRT
list. Accuracy of data and opinions
expressed
are the sole responsibility of the
DIRT editor
and are in no sense the publication
of the ABA.
Parties posting messages to DIRT are posting to
a
source that is readily accessible by members
of
the general public, and should take that
fact
into account in evaluating
confidentiality
issues.
ABOUT DIRT:
DIRT is an internet discussion group for serious
real estate professionals. Message volume
varies,
but commonly runs 5 15 messages
per work day.
Daily Developments are posted every work day.
To
subscribe, send the message
subscribe Dirt [your name]
to
listserv@listserv.umkc.edu
To cancel your subscription, send the message
signoff DIRT to the address:
listserv@listserv.umkc.edu
for information on other commands, send the
message
Help to the listserv
address.
DIRT has an alternate, more extensive coverage that includes
not only
commercial and general real estate
matters but also focuses specifically upon
residential real estate matters. Because real estate brokers
generally find
this service more valuable, it
is named “BrokerDIRT.” But residential
specialist attorneys, title insurers, lenders and others interested in
the
residential market will want to subscribe
to this alternative list. If you
subscribe to BrokerDIRT, it is not necessary also to subscribe to DIRT,
as
BrokerDIRT carries all DIRT traffic in
addition to the residential discussions.
To subscribe to BrokerDIRT, send the message
subscribe BrokerDIRT [your name]
to
listserv@listserv.umkc.edu
To cancel your subscription to BrokerDIRT, send the
message
signoff BrokerDIRT to the
address:
listserv@listserv.umkc.edu
DIRT is a service of the American Bar
Association
Section on Real Property, Probate
& Trust Law and
the University of Missouri,
Kansas City, School
of Law. Daily
Developments are copyrighted by
Patrick A.
Randolph, Jr., Professor of Law, UMKC
School of
Law, but Professor Randolph grants
permission
for copying or distribution of Daily
Developments for educational purposes, including
professional continuing education, provided
that
no charge is imposed for such distribution
and
that appropriate credit is given to
Professor
Randolph, DIRT, and its
sponsors.
DIRT has a WebPage at:
https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=http://cctr.umkc.edu/dept/dirt/
*************************************
Your e-mail address will only be used within the ABA and its entities. We do not sell or rent e-mail addresses to anyone outside the ABA.
To change your e-mail address or remove your name from any future general distribution e-mails you can call us at 1-800-285-2221, or write to: American Bar Association, Service Center, 321 N Clark Street, Floor 16, Chicago, IL 60610
If you are an ABA member, log in to the ABA Web site at https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=http://www.abanet.org/abanet/common/MyABA/home.cfm to edit your member profile. Otherwise, complete the form located at https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=https://www.abanet.org/members/join/coa2.html
To review our privacy statement, go to https://e2k.exchange.umkc.edu/exchweb/bin/redir.asp?URL=http://www.abanet.org/privacy_statement.html.
If you have any problems, please contact the list owner
at
dirt-dd-request@mail.abanet.org.