LIBERTY PLAN COMPANY v. Adwan

Supreme Court of Oklahoma
1962 OK 80, 1962 Okla. LEXIS 334, 370 P.2d 928 (1962)

ELI5:

Sections

Rule of Law:

A landlord does not accept a surrender of a lease merely by re-entering abandoned premises to mitigate damages, provided the landlord gives notice of refusal to accept the surrender; furthermore, minor alterations made to re-let the premises do not release the original tenant from liability.

Facts:

Adwan (Landlord) and Liberty Plan Company (Tenant) executed a lease for a commercial room in Oklahoma City on February 14, 1950.
The lease included options to renew, extending the term until March 1, 1960.
On July 30, 1953, the Tenant vacated the property early, mailed the keys to the Landlord, and sent a letter stating they desired to relinquish the lease immediately.
On August 7, 1953, the Landlord replied via letter, explicitly stating that accepting the keys did not constitute a waiver or release of obligation.
The Landlord's letter informed the Tenant that the Landlord would attempt to re-rent the property to mitigate damages but would hold the Tenant liable for costs and lost rent.
The property remained vacant for several months before the Landlord found a new tenant.
To accommodate the new tenant, the Landlord installed a tile floor and created a doorway into a south room.

Procedural Posture:

Plaintiff (Landlord) sued Defendant (Tenant) in the trial court for unpaid rents.
Defendant filed an answer and cross-petition seeking damages for failure to repair the roof.
The jury returned a verdict in favor of the Plaintiff for the full amount of rent.
Defendant appealed the judgment to the Supreme Court of Oklahoma.

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Issue:

Does a landlord accept a tenant's surrender of a lease, thereby releasing the tenant from future liability, by accepting the keys, notifying the tenant of an intent to mitigate damages, and making minor alterations to re-let the premises?

Opinions:

Majority - Per Curiam

No, the landlord's actions did not constitute an acceptance of surrender that would release the tenant from the lease. The court reasoned that under Oklahoma law, when a tenant wrongfully abandons premises, the landlord has the specific right to notify the tenant of a refusal to accept surrender and subsequently sublet the premises to mitigate damages. The court noted that the Landlord's letter of August 7 expressly preserved his rights. Furthermore, the court rejected the Tenant's argument that the physical changes to the property (tile floor and doorway) were substantial enough to constitute a breach or exclusion of the Tenant. Citing precedent, the court distinguished these minor changes from cases where a landlord fundamentally altered the use of a property. Therefore, the Tenant remained liable for the unpaid rent.

Analysis:

This case reinforces the doctrine of mitigation of damages in landlord-tenant law. It clarifies that a landlord is not forced to choose between letting a property sit vacant to preserve a claim against a tenant or releasing the tenant entirely by trying to rent to someone else. By allowing landlords to re-enter, make minor repairs, and re-let on the defaulting tenant's behalf—so long as proper notice is given—the court promotes economic efficiency. The decision creates a safe harbor for landlords: as long as they explicitly communicate that they are not accepting the surrender of the lease, they can take possession of the keys and the physical space to reduce the financial loss for both parties.

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