Former Tenant Doesn't Owe Rent Under New Tenant's Prior Lease

August 31, 2002

An office building tenant violated its lease and moved out of its space. To mitigate—that is, lessen—its damages, the owner moved one of its other tenants into the former tenant's space and, under a new lease, charged a higher rent than the former tenant had paid. The owner then sued the former tenant for the rent due under the other tenant's prior lease—which covered the other tenant's old space in the building. The former tenant refused, arguing that it never agreed to pay that rent.

An office building tenant violated its lease and moved out of its space. To mitigate—that is, lessen—its damages, the owner moved one of its other tenants into the former tenant's space and, under a new lease, charged a higher rent than the former tenant had paid. The owner then sued the former tenant for the rent due under the other tenant's prior lease—which covered the other tenant's old space in the building. The former tenant refused, arguing that it never agreed to pay that rent.

A Missouri appeals court ruled that the former tenant wasn't responsible for paying any rent due under the other tenant's prior lease. The court noted that the owner hadn't gotten the former tenant's consent before asking it to pay “rent on space it never contracted to lease.” Plus the owner wrongly waited six months after the other tenant switched spaces before it told the former tenant that it owed the rent under the other tenant's prior lease. So the owner deprived the former tenant of the opportunity to find someone else to occupy the other tenant's old space [Centerline Investment Co. v. Tri-Cor Ind., Inc.].

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