Rios v. Carrillo
53 A.D.3d 111, 861 N.Y.S.2d 129 (2008)
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Rule of Law:
Under New York common law, a residential landlord is under no duty to mitigate damages by reletting the premises after a tenant defaults on a lease.
Facts:
- In 2000, a plaintiff landlord leased a residential apartment to a defendant tenant for a two-year term.
- Around October 2001, approximately one year before the lease was set to expire, the defendant tenant vacated the apartment.
- After vacating, the tenant stopped paying rent.
- The tenant contended that he vacated the apartment with the landlord's consent.
- The lease agreement between the parties provided that the tenant would remain liable for all monetary obligations arising under the lease even upon cancellation.
Procedural Posture:
- In 2003, the plaintiff landlord sued the defendant tenant in the New York Supreme Court (a trial-level court) to recover unpaid rent.
- After a nonjury trial, the Supreme Court dismissed the landlord's complaint.
- The trial court found that the landlord had a duty to mitigate damages and had failed to prove she made a serious attempt to do so.
- The plaintiff landlord (appellant) appealed the judgment of dismissal to the Appellate Division of the Supreme Court (an intermediate appellate court).
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Issue:
Does a residential landlord have a common-law duty to mitigate damages by attempting to relet the premises when a tenant vacates before the end of the lease term?
Opinions:
Majority - Lifson, J.
No. A residential landlord does not have a common-law duty to mitigate damages when a tenant defaults. The court reasoned that well-settled precedent from the New York Court of Appeals in Holy Props. v Cole Prods., which held that leases are not subject to the general contract rule requiring mitigation, is controlling. Although Holy Props. involved a commercial lease, this court found its rationale, rooted in the principle that a lease is a 'present transfer of an estate in real property' rather than a simple executory contract, applies with equal force to residential leases. Once the lease is executed, the tenant's obligation to pay rent is fixed for the term. The court concluded that until the state's highest court or the legislature alters this rule, lower courts are bound to follow the precedent that landlords have no obligation to relet abandoned premises to minimize a defaulting tenant's damages.
Analysis:
This decision reaffirms and extends a traditional, property-law-based view of leases in New York, resisting the modern trend of treating leases as ordinary contracts. By applying the rule from the commercial lease case Holy Props. to the residential context, the court solidifies a landlord-friendly precedent that distinguishes New York from many other jurisdictions that do impose a duty to mitigate. The ruling clarifies that any change to this long-standing principle must come from the state's highest court (the Court of Appeals) or the legislature, not from lower appellate courts.
