Owner Could Sue Tenant for Rent and Damages Caused by Its Default

A lease gave the owner several remedies if a tenant defaulted, including the right to retake the space and relet it without terminating the lease. And the lease said that if the owner was unable to relet the space or if the new tenant's rent was insufficient to cover the owner's costs, expenses, and damages, the tenant had to pay the owner the shortfall. The tenant moved out early and stopped paying rent. The owner took back the space without terminating the lease and sued the tenant for two months' rent due. The court ordered the tenant to pay the owner over $150,000 for two months' rent. When the owner failed to relet the space after trying for nearly a year, it sued the tenant again for past and future rent and for damages caused by its default. The tenant argued that the owner couldn't sue it again because the owner should have made these claims in its first lawsuit.

A Georgia appeals court ruled that the owner could sue the tenant for rent and for damages caused by the tenant's default. The court said that the lease didn't bar the owner from suing the tenant twice. In fact, the court noted, the owner couldn't have known at the time of the first lawsuit that it would be unable to relet the space. Because the lease clearly made the tenant responsible for any shortfall resulting from its default, the owner could sue the tenant again for past and future rent and for damages, the court said [International Biochemical Indust., Inc. v. Jamestown Mgmt. Corp.].