Question

Business Law

1) Sally has signed a 12 month on an apartment with Ted the landlord. After two months Sally decides to move to another town to seek a better job and tells Ted she is breaching her lease. Ted spends two months angrily demanding that she pay the rent even she isn't living there and then decides to find a new tenant. He places ads in several papers and real estates magazines, which cost him $250. He receives applications from several prospective tenants and estimates that he spends four (4) hours processing paperwork before fictionalizing a new lease with Victor by the end of the third month after Sally left. The new tenant agrees to the same $1000 per month that Sally was paying before the breach. What would your judge to be the closest calculation of Ted's damages, under the rules we have learned? And explain your reasoning for your answer and show your calculation.

a) $10,000

b)$3,000

c)$3,250

d)$1,290

Answer 1

Answer: d) $1290

Explanation:

The landlord should use reasonable means to find new tenant if the tenant abandons the premises. The landlord is required to lease the premises to the new tenant to mitigate the damages recoverable from the former tenant. Hence when Sally told Ted that she is breaching the lease, Ted should have tried to find a new tenant. But he spent two months demanding Sally to pay the rent. As per law, the former tenant is liable for the difference between the amount of the rent under the original lease and the rent received from the new tenant. If the landlord does not take reasonable steps to mitigate the damages, the court is likely to reduce the award by the amount of rent the landlord could have received if he had done so. Here the new tenant came in the end of third month and the new rent is also same as before, $1000. The total loss in the form of rent is $3000. Ted did not take any reasonable steps in the first two months. Hence court will reduce first two months rent from the award and the amount will become $3000-$2000= $1000. Ted has also spent $250 for advertisement. Hence the damages would become $1250. Ted has also spent four (4) hours processing paperwork before fictionalizing a new lease. Considering minimum wages per hour and four hours of work, the damages would be somewhere near $1290.