Breach of Lease Requires Landlord to Mitigate Damages

Question: We signed a one-year lease for a Scottsdale condominium for $2,800 a month. The lease was from April 1, 2020, to April 1, 2021. Last week we signed a purchase contract to buy a Chandler home. The close of escrow on the Chandler home will be January 31, 2021. We have notified our landlord that we will be moving out of our Scottsdale condominium on January 31, 2021. The landlord was not happy, however, and said that we are still liable for the $2,800 a month rent for the last two months of our lease. Our understanding is that, even if we have breached the lease two months early, our landlord must make reasonable efforts to find a new tenant for those last two months of rent. Otherwise, we have no liability to the landlord for the last two months of rent. Our landlord, however, is now advertising our Scottsdale condominium for rent beginning February 1, 2021 with rent of $3,300 a month, not $2,800 a month. In fact, there is even a notice in our condominium clubhouse posted by our landlord that our condominium will rent for $3,300 a month beginning February 1, 2021. We believe that our landlord should be able to find a new tenant even at $3,300 a month with spring training and other spring activities in Scottsdale. If the landlord does not, however, are we liable to the landlord for $2,800 monthly rent for the last two months of the lease?

Answer: Probably not. If a tenant breaches a lease and moves out, the landlord has a duty to make reasonable efforts to re-let the leased premises to a new tenant in order to mitigate damages. For example, the landlord could hire a leasing agent, advertise in the Arizona Republic, or put the Scottsdale condominium on MLS, in order to prove reasonable efforts to rent your Scottsdale condominium. The advertising to lease your Scottsdale condominium only for the higher $3,300 a month is not reasonable efforts by your landlord to mitigate damages. Therefore, you should have no liability to your landlord for the last two months of your lease.

Note: If rents drop in your Scottsdale condominium community, and a new tenant will only pay $2,600 a month, you may have to reimburse your landlord $400 for the two months of lost rent.