Tenant Not Liable for Post-Surrender Damages to Property

What Happened: In the summer of 2018, a tax firm tenant shut down its business and moved out of the building it was leasing. The surrender was documented in a written agreement that the tenant and landlord both signed. A few months later, the property was sold. During a severe cold spell in January 2019, the water pipes froze and burst, inflicting flooding damage so severe that the building had to be demolished. The landlord blamed the burst pipe disaster on the tenant’s failure to keep the premises heated, noting that the tenant was still paying rent and utilities on the building.

Ruling: The Wisconsin federal court dismissed the landlord’s claims without a trial.

Reasoning: The tenant turned in its keys and expressly surrendered the property to the landlord in writing; the landlord expressly accepted the keys and the tenant’s surrender in writing. Although it still paid rent and utilities, it had no access to and couldn’t sublet or assign the property. “To hold [the tenant] liable for damage that occurred months after it had lawfully surrendered that Property, with all parties fully aware that [the tenant] had moved out, would be ludicrous,” the court concluded.

• Lynn Props., LLC v. JTH Tax Inc., 2022 U.S. Dist. LEXIS 155823, 2022 WL 3908774