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Landlord Cannot Collect More than Actual Damages

Landlord and Tenant entered into a long-term commercial lease. After the Tenant vacated, Landlord terminated the lease, and sued to recover legal possession of the space and for rents that were then past due and owing. Landlord won that lawsuit. Thereafter, the Landlord commenced a second action seeking the amount that the Landlord would have collected assuming the completion of the full lease term.

The Court of Appeals confirmed the Landlord’s attempt to recover that rent, but held that the Landlord could not recover more than the value of the lease. Because the lease allowed the Landlord to hold possession of the space and accelerate and collect the not discounted rent that would otherwise become due over the term of the lease, the Court determined that a hearing had to be held to decide if that amount, given that the Landlord had relet the space, was disproportionate to the Landlord’s actual loss, even though the Landlord had possession but no duty to mitigate.

172 Van Duzer Realty Corp v. Globe Alumni Student Assistance Association, Inc.

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