Mountain Law: Landlord considerations when the tenant breaks the lease
June 5, 2018
This article is about abandonment issues. No, not the kind you might get from childhood loss, the kind a landlord has when a tenant prematurely vacates the premises in violation of the lease.
Wrongful eviction. If a landlord improperly concludes that a tenant has abandoned the premises, and re-takes possession without going through a formal eviction process, the landlord could be liable to the tenant for wrongful eviction. It's not unheard of for a landlord to mistakenly believe that a tenant has abandoned the premises when the tenant is merely traveling. Like commenting about a woman being pregnant, a landlord needs to get this right. In case of doubt, a careful landlord will do an eviction. If a tenant has left behind personal property, a landlord may need to do an eviction to avoid liability for disposing of it. If a landlord is going to assume that a tenant has abandoned the premises, and skip eviction, one or more of the following factors must be present: the return of keys, the substantial removal of the tenant's personal property, notice by the tenant, or the extended absence of the tenant while rent remains unpaid. Alternatively, a landlord and tenant can agree in writing to terminate a lease. Any such agreement should be explicit about the parties' rights.
Mitigation of damages. Just because the tenant abandoned the premises does not necessarily mean that the lease itself terminated. For example, if the term of the lease runs through October and the tenant abandons in June, the tenant could remain liable for rent from June through October. However, the landlord has a duty to "mitigate damages," which means the landlord must try to re-rent the premises and credit the rent received from a new tenant to the amount that would be owed by the original tenant (after deducting the reasonable expenses of re-renting). The original tenant can potentially use failure to mitigate as a defense in a damages suit.
Assignment. Often a tenant who wishes to abandon a lease will ask the landlord to consent to assign the lease to a new tenant. Unless the lease indicates that the landlord has absolute discretion in this regard, it is arguable that a landlord cannot unreasonably withhold such consent. Again, a tenant could potentially use unreasonable denial of assignment as a defense in a damages suit.
Accounting for security deposit. Colorado requires landlords to account for any security deposit within a certain time "after the termination of a lease or surrender and acceptance of the premises, whichever occurs last." (The default time is one month, but a longer period not to exceed 60 days can be stated in the lease.) In the above example, if surrender and acceptance happened in June, but termination of the lease did not happen until October, then the time for the landlord to account for the security deposit would not start running until October (because that occurred last). However, it is safest for landlords to account within the required time after the abandonment even if this might be premature legally.
In sum, if a landlord thinks a tenant has abandoned the premises, the landlord should consider whether it is necessary to do a formal eviction. Once the landlord re-takes possession of the premises, the landlord has a duty to mitigate damages by taking reasonable steps to re-rent the premises. If the tenant asks the landlord to agree to an assignment, the landlord arguably must do so reasonably unless otherwise stated in the lease. The landlord should consider when the time begins running to account for any security deposit and ensure compliance. When in doubt about any abandonment issues, a landlord may wish to obtain a legal opinion.
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Noah Klug is owner of The Klug Law Firm, LLC, in Summit County, Colorado. He may be reached at 970-468-4953 or Noah@TheKlugLawFirm.com.
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