Q. My wife and I have rented a condo for nearly two years as good tenants. We are expecting our first child at the end of January so decided we needed to move into a larger space before the baby is born. We move December 20th, but our lease does not expire until the end of February. The owner has a two-month security deposit and December’s rent has been paid.
When we informed the landlord of our intention at the beginning of November, we assumed that given the highly desirable location on the Upper West Side coupled with a very affordable price, we would be given the green light to quickly re-rent the apartment to new tenants, as our lease stipulates is an option to mitigate our financial responsibility. Instead, the landlord seems to have decided against re-renting the unit at all and will pursue a sale of the condo. That said, it has been a month and the unit has not yet been listed for sale. Also, a short-term sublet situation is not possible given the rules of the building.
My question is, given that we have not been afforded the opportunity to find suitable replacement tenants, and that the owner is dragging his feet on listing the property for sale, it seems like we should be released from further obligation to pay rent through the end of the lease and that we should be entitled to a full refund of our security deposit less any reasonable hold back for damages. In effect, the landlord is bringing upon himself any "damages" from us breaking the lease by not allowing us to mitigate them.
A, The general rule in New York is that landlords do not have a duty to mitigate the damages of their tenants. That means, that in theory, if a tenant were to move out and stop paying rent prior to the expiration of the lease term, the landlord could leave the apartment vacant and then sue the tenant for every month on the term that rent was unpaid without making any effort to collect rent from a third party. Historically, there has been some disagreement amongst the lower courts as to whether this rule applies to residential leases, but it has generally been presumed that it does since the Rios v. Carrillo case in 2008 (though some case law has since contradicted that point but seemed to be based on extenuating facts and could vary by the county one lives in).
However, it appears from the information that you shared that the real issue may not be mitigation. That is because your landlord would be under no obligation to offer the property for rent beyond the end of your lease term which would apparently be the only course of action within their control. In order to mitigate their damages, they would need to either 1) extend your lease past your lease term to accommodate a new long-term tenant against their will; or 2) violate the building’s rules by agreeing to a short-term tenant who could sublet for the duration of your lease. Under no instance would the landlord be required to do either. Because your building doesn’t permit short-term leases and the landlord doesn’t wish to continue to rent the apartment after February, there is little they can do to mitigate their damages and thus their obligation to do so is of little issue.
You could attempt to negotiate with the landlord to come to an agreement regarding the last two months of rent, but you frankly have little leverage. If you can determine if the landlord has any needs that you can accommodate such as a desire to show or photograph the property for sale with the furnishings you have in place or the desire to show at will without your prior permission, then perhaps you can bring something to the table worth negotiating over.
Mike Akerly is a New York City real estate attorney, landlord, and real estate broker. He is also the publisher of the Greenwich Village blog VillageConfidential.
Note: The information provided here is for informational purposes only. It should not be construed as legal advice and cannot substitute for the advice of a licensed professional applying their specialized knowledge to the particular circumstances of your case.