Owner Tried to Mitigate Damages

Facts: One year into a five-year lease agreement, a tenant stopped paying rent. After the owner demanded payment, the tenant entered into a separate agreement to bring the rent payments current. The tenant eventually vacated the space. The owner sought additional rent, but the tenant argued that it did not owe the additional rent and claimed that the owner failed to mitigate its damages by not making a reasonable effort to find a new tenant for the premises.

The owner sued the tenant and argued that it made reasonable efforts to lease the space. The trial court ruled in favor of the tenant and said that the owner was not entitled to any additional rent because it did not meet its duty to mitigate. The owner appealed.

Decision: A Texas appeals court reversed the trial court's decision and ruled in favor of the owner.

Reasoning: The court noted that the owner has a duty to make reasonable efforts to mitigate damages when a tenant breaches a lease and abandons the premises. However, the court also noted that it is not an absolute duty, meaning that an owner is not required to make all known efforts or accept an unsuitable tenant.

Also, the court pointed out the fact that the tenant bears the burden of proof to demonstrate that the owner failed to mitigate and the amount by which the owner could have reduced its damages if it had mitigated. In the present case, the tenant did not offer any evidence to support its allegation that the owner failed to make reasonable efforts to mitigate.

• MOB 90 of Texas v. Nejemie Alter, M.D., April 2009