Ending the Tenancy

Most of the time, ending the tenancy occurs without conflict. The lease expires and the parties leave. Sometimes the parties surrender the lease and terminate it early. However, conflict arises when a tenant abandons the premises early and stops paying rent or remains on the property without paying rent.

Abandonment

A tenant abandons the lease when they vacate the premises without cause (with cause would be constructive eviction, not abandonment), plan on never returning, and stop paying rent. In this situation, the landlord has three ways to recover. First, the landlord can wait until the lease ends and sue for all the rent. Second, the landlord can terminate the lease. Third, the landlord can rent out the property again, and then sue for the balance of rent not covered during the original lease term (mitigate the damages).

Sommer v. Kridel

378 A.2d 767 (N.J. 1977).

Sommer is the plaintiff who lost in trial and won in appeal before Kridel made this appeal.

Question

Whether a landlord is required to attempt to mitigate the damages after a tenant has defaulted.

Rule

When a tenant abandons, the landlord has a duty to make a reasonable effort to mitigate damages by reletting the property. When the landlord has multiple vacant premises, the abandoned property is to be treated as any other vacant location.

Holding

A landlord does have a duty to make reasonable efforts to mitigate damages. Reversed.

Facts

Kridel was a student who was engaged to be married when he entered the lease. However, the engagement ended, the couple’s funding for rent was terminated, and Kridel would not be able to pay rent. He wrote to the landlord to inform him of the inability to pay and asked for a surrender of the lease. However, the landlord did not reply to the letter, refused to rent out the vacant premises (even though there was interest in the space), waited until the expiration of the lease, then sued Kridel for the balance of the lease.

The trial court found for the defendant because the landlord should have engaged in fair dealing but failed to do so. The appellate division reversed and Kridel appealed.

Analysis

In the present case, the landlord did not engage in efforts to relet the apartment until the lease had expired, accruing damages against the tenant. Additionally, the property did have an interested party, and the damages could have been mitigated. As such, it makes sense that the tenant would not be liable for the landlord’s failure to mitigate an easily controlled situation. Of course, the landlord could reject the new tenant, but there was no present reason for doing so.

Further, the landlord has the burden of proof to show that they exercised reasonable efforts. This is because they are in a better position to show the efforts made. Reasonable efforts can be shown by the number of times the apartment was shown to prospective tenants or advertised in a local newspaper. The defaulting tenant could then counter by showing how rejected tenants would have been suitable.

Additional Notes

The main takeaway from this case is that the remedies available to the landlord have been more narrow. For instance, landlord is no longer able to sue for all the rent. Instead, the only remedies available is to terminate the lease or mitigate damages and then sue for the remaining balance.

Note once again the difference between abandonment and constructive conviction. Constructive conviction requires a good reason to leave while abandonment is leaving for no reason at all.

Case

Here, there was no acceptance of Kridel’s offer (silence is not acceptance in contract law) to cancel the lease with the payment of the original two months already paid.

Instead, his defense is that the landlord should have attempted to mitigate the damages by finding a different tenant.

Why is the duty on the landlord instead of the tenant? The tenant could have found a sublessee or assignee. However, the court argues that the landlord is an easier position to find a new tenant.

Here, the landlord could have mitigated the costs because a prospective tenant specifically wanted the apartment rented to Kridel. The argument from the landlord is that there is still a loss of sale; instead of having two rented out apartments, I only had one. Here, the court counters arguing that the individuals could be specifically attracted to certain apartments (e.g. direction of the windows, floorpan, ground level, views, etc.).

So the standard:

1. The landlord has to exercise reasonable efforts to mitigate damages by treating the abandoned apartment as another vacant stock (what is the usual practice for advertising a vacant apartment?).

Security Deposit

At the inception of the lease, many landlords collect a security deposit which may be used to repair or clean an apartment, or to cover defaulted rent while the landlord seeks a suitable replacement. However, several jurisdictions have passed regulations concerning the security deposit, ensuring that it is used for specific purposes, not used for ordinary wear and tear, and is not withheld due to bad faith. Additionally, in most situations, the landlord has the burden to show good cause for withholding a security deposit and must show the tenant the itemized uses that were utilized within a reasonable time.

Eviction

The first case discusses what happens when a tenant is evicted as a retaliation. The second case discusses the procedure for an eviction.

Elk Creek Management Co. v. Gilbert

303 P.3d 929 (Ore. 2013).

The Gilberts are the defendants who lost in both trial and appellate court before the Supreme Court accepted this appeal.

Question

Do the tenants have to show that their complaint caused an injury and that the landlord in turn wanted to injury them?

Rule

All a tenant has to show is that the landlord retaliated because of the protected actions taken by the tenant.

Holding

Reversed and Remanded.

Facts

Here, the tenants complained about the electrical system within the rented space. Shortly thereafter, the landlord inspected the apartment twice, once with a landlord. When the landlord saw the expenses required to repair the electrical system (about 4,000), he sent a notice of termination to the tenants. However, the tenants refused to leave so the landlord began eviction proceedings. The defense then offered by the tenants was that the termination was done in retaliation against their complaint.

Analysis

The legislative intent in passing the statute prohibiting against retaliation says nothing about the tenant needing to show that they injured and were then injured in return. Instead, the tenant only needs to show that they took a protected action and then the landlord took another action because of the tenant’s action.

Additional Notes

The is increasingly restricting the landlord’s right to evict a tenant. This case was an example where the landlord is not allowed to evict as a retaliation. Other restrictions include: landlords cannot discriminate, must provide habitable housing, and must mitigate.

Under the common law, a landlord could evict for any reason. However, it appears that the landlord here wanted to evict so that the repairs could be made and then charge future tenants a higher rent.

This rule is necessary to uphold the purpose of the implied warranty of habitability. If the landlord could simply kick out tenants who complain about habitability, then the warranty would have no purpose.

According to the Oregon statute, it restricted retaliation for the tenant’s actions including: making complaints, becoming a part of the union, testifying against the landlord, previously won a lawsuit against the landlord. Note that the statute only protects these specific actions. After the action occurs, the landlord is not allowed to: increase rent or decrease service, terminate the tenancy, or threaten action for possession.

So, the tenant needs to show that the activity was a substantial factor in the decision to evict. If a landlord wishes to engage in one of those actions (for a good reason), and the tenant had recently engaged in a protected activity, the landlord should wait a while so there is no accusation that the activity occurred because of the tenant’s protected activity.

Berg v. Wiley

264 N.W.2d 145 (Minn. 1978).

Wiley is the landlord defendant who lost in trial and appeal before this appeal.

This case outlines the difference between eviction proceedings. There are two options: self-help or judicial enforcement. Self-help means that the landlord retained the right to re-enter the premises and peacefully evict the tenant.

Question

Did the trial court get it wrong in saying that there was no abandonment, and that the eviction was not peaceful?

Rule

Traditionally:

Can use self help if:

1. Landlord is entitled to possession
2. Re-entry is peaceable.

Modern:

No self-help remedy.

Holding

Wiley’s re-entry was not peaceable. As such, he is subject to a wrongful conviction claim. Additionally, the court determines that there is no longer an interest in having a self-help remedy. Affirmed.

Facts

Berg leased the premises from Wiley and opened a restaurant. Part of the lease included provisions that the tenant would not alter the building structure and operate the restaurant in according with health codes. Berg violated both provisions. As such, Wiley allowed Berg to remedy before he took action to evict. When she failed to do so, he came to change the locks and she resisted. An officer settled the issue that night with no remedy for either party but advised both to consult a lawyer. Wiley consulted his lawyer who advised him to change the locks. Wiley did so with an officer and locksmith present, out of the absence of Berg. When Berg went to the premises the next day, she found herself locked out. As such, she sued for wrongful eviction.

The jury found in favor of Berg and awarded over 30,000 in wrongful eviction damages and about 4,000 in damages to chattel.

Analysis

First, there was no abandonment or surrender of the property (intentions of Berg showed otherwise). As such, the question turns to whether there was a wrongful eviction. The landlord can be properly protected from a wrongful eviction claim if he meets the elements outlined in the rule earlier. Although he did have the right of possession, he did not do so peaceably. The only reason why there was no violence was because Berg was not present. Had she been there, a fight would have “no doubt” broke out.

Additionally, the courts are averse to any self-help remedies desiring landlords to rely more on the judicial system for enforcement (taking as little as 3-10 days for eviction proceedings to complete).

Additional Notes

According to common law, there is no wrongful conviction if the landlord is legally entitled to possession or if the lease was breached, and if the landlord peacefully reenters.

• Legally entitled to possession: came from the breach of the lease. Met.
• Peacefully reenters: would have been violent if she was present. Not met, should have been agreeable.

As a result, the courts want to adopt a modern approach where you are not able to use self-help to evict. Instead, you should evict through the judicial and executive process.

The takeaway:

• Self-help evictions are no longer a viable option for landlords. Contested evictions could take 3-6 months while uncontested evictions take 3-10 days.

Takeaways

• The landlord is more restricted now.
  1. Abandonment
     • The landlord can only terminate the lease or mitigate damages, then sue for the unpaid balance.
  2. Eviction
     • Landlords are not allowed to evict through retaliation (in certain cases).
     • Most states only allow landlord to convict through the judicial process.

Disclaimer

The content contained in this article may contain inaccuracies and is not intended to reflect the opinions, views, beliefs, or practices of any academic professor or publication. Instead, this content is a reflection on the author’s understanding of the law and legal practices.