One of our property management staff recently posed a question concerning a scenario where a tenant vacated a property eight months before their lease ended. They inquired: “If a tenant vacates early and the owner is not making any effort to re-lease the property, can we still charge rent or at what point do we stop charging?”
This question touches upon a fundamental aspect of Texas property management and landlord-tenant law, specifically regarding the duty for a landlord to mitigate damages.
The Legal Framework
According to Texas Property Code Section 91.006, a landlord has a duty to mitigate damages if a tenant abandons the leased premises in violation of the lease​​. This statute makes it clear that any lease provision attempting to waive this responsibility is void. Furthermore, the Texas Association of Realtors (TAR) lease agreements typically reflect this duty, underscoring the requirement for landlords to make reasonable efforts to re-lease the property.
Additionally, according to an article on the Silberman Law Firm blog, a landlord is required to “use objectively reasonable efforts to re-lease the premises to a tenant suitable under the circumstances”​​. This principal, underscored in cases like White v. Harrison and Hoppenstein Properties, Inc. v. Schober, establishes that a landlord’s recovery for damages can be significantly limited if they fail to demonstrate efforts to mitigate these damages​​.
Implications for Property Management
In the context of our employee’s question, this means that while we, as the management company, can continue to charge the tenant, the landlord’s lack of action in attempting to re-lease the property could potentially limit the amount of recoverable damages. This situation exemplifies the legal requirement for landlords to mitigate damages by making reasonable efforts to find a new tenant.
Best Practices for Landlords and Property Managers
- Active Re-Leasing Efforts: Landlords should actively seek new tenants for the vacated property. This not only aligns with legal obligations but also helps minimize potential financial losses.
- Documentation and Communication: Maintain thorough records of all efforts to re-lease the property. This documentation can be crucial if the matter escalates to a legal dispute.
- Understanding the Lease Agreements: Familiarize yourself with the specific clauses in the TAR lease agreements regarding the duty to mitigate. This knowledge can guide actions and decisions during such scenarios.
- Consultation with Legal Professionals: In complex situations, seeking advice from legal professionals with expertise in Texas landlord-tenant law is advisable.
In summary, the landlord’s failure to mitigate damages by not attempting to re-lease a vacated property is an affirmative defense that the tenant can raise. While the management company can continue to charge rent under the lease, the landlord’s inaction could significantly impact the recoverability of damages. It’s imperative for property managers and landlords to understand and actively engage in their duty to mitigate as per Texas Property Code and TAR lease agreements.