A Landlord's Secret Weapon Against Defaulting Tenants

April 18, 2011Article
Greenberg Glusker Client Alert

Under California law, landlords are entitled to receive the total consideration of the lease after a  default. However, breaching tenants many times are able to discount the value of the remaining  term of the lease by demonstrating that the landlord could have reduced his losses by leasing to  someone else or by finding an expert witness to testify that the leasing efforts were less than  stellar. At the very least, this issue can often preclude prevailing on a summary judgment  motion. Therefore, it is often difficult and expensive for a landlord to be made fully whole after  a trial, arbitration or mediation.  
There is, however, a little known, yet powerful right under California law that removes any  obligation by landlord to mitigate damages if a tenant breaches a lease and voluntarily vacates  the premises. While Civil Code §1951.4 shifts the power back to the landlord, this right is  subject to certain limitations and landlords need to be aware of this remedy, when it is available,  and when it makes sense to use it.