Don’t Rely on Tenant’s Efforts to Re-Rent Vacant Space

Don’t ease up on your efforts to re-rent space that a tenant has vacated early—even if the tenant is doing its own search for somebody to take over its rent obligations. While spending your own time and money might seem like a needless reduplication of effort, sitting back and counting on the tenant to line up a replacement can prove even more costly.

An Ohio landlord learned this lesson the hard way. The problems began when a frozen yogurt shop tenant shut down operations and stopped paying rent after year one of its three-year lease. After reassuring the landlord that it would find a new tenant to take over, the tenant posted ads for the space and even displayed a “For Rent” sign in the shop window. Figuring that the tenant had the immediate challenge under control, the landlord shifted its marketing efforts to longer-term and broader projects like sending fliers advertising the property to hundreds of businesses across the country and designing new brochures. Meanwhile, the search for a new tenant dragged on and on.

Finally, after two years, a new tenant was found. The landlord then sued the original tenant for the two years’ unpaid rent. No dice, said the Ohio court. The duty to mitigate required the landlord to take “prompt, reasonable, and ordinary steps” to re-rent the space. The landlord didn’t do these things but instead relied on the tenant to find a new tenant. As a result, it wasn’t entitled to the back rent [Chillicothe Plaza Associates v. Taylor, No. 1970, Ohio App. LEXIS 2861].