tenant wants to break lease

bigbuff:

1. New York's highest court recently reaffirmed the 19th century rule that residential landlords
do not need to mitigate the damages caused by their tenants early move-outs, but can instead
hold them to their leases without making any effort to re-rent early

2. that ruling, while fully binding and enforceable in NY courts, is inconsistent with the
rest of New York contract law, the law in other states, and the rule of the Uniform
Commercial Code, America's law of sales, which has been adopted by all 50 states

2. also, July and early August are not good times to rent; late August and
Labor Day are better times

Just let them go. You going to go to Court with them?

Negotiate for an extra month from them. Find a new tenant. Don't rent to corporations, that flips the regular power structure on its head and this is what can happen.

First step is to consult your own attorney and get an honest assessment as to the validity of your claim.

How large a corporation? If it is a large, well-known company, you may (counter-intuitively) have more leverage than if you are dealing with a founder-led small cap company. Fortune 500 companies (particularly consumer businesses like Verizon etc) don't want the bad publicity of appearing to not honor their obligations (I say "appearing" because, in the minds of their legal dept, they have no obligation). Tell them you can cause them a lot of bad publicity. They'll rattle their swords and threaten to sue you if you say something slanderous, but remind them the risk is assymetrical: They could easily lose millions in value from one well-placed yelp review, whereas you have little to lose. The other reason you have leverage is for the same reason companies often settle employee lawsuits: It's a minimum $100K to litigate an employee lawsuit. While this is a much simpler matter, you can still remind them that the $20K or so they owe you can easily be exceeded by the costs to fight this thing - and you'll do it on principle. If they offer half of what they owe you, take it and run. There is a benefit to a corporate client: if their tenant or their movers do any damage on the way out, you have deep pockets to go against (as opposed to the typical renter w/ little savings who is judgment proof).

Now, if you are dealing with a small founder-led company, its a tougher road. They are much cheaper and much less ethical. I've worked with both fortune 10 companies and small founder-led startups, and my experience is that the ethical divide is vast. Still, you can consult an attorney and see if you are on strong enough legal grounds to try to regroup some of your losses.

Al:

1. you are assessing credit risk of holding the tenant to its lease
2. that is a very valid and reasonable approach Io the problem

3. but the starting point is and should be that the tenant is unconditionally
bound by its lease

4. I don't enforce that principle blindly
5. when I can re-rent at a higher cost I release my tenants from their leases

6. I also apply mitigation of damages principles when a tenant has a good
reason for leaving early: loss or change of job, illness or death of parent