Q–A tenant of mine has told me she intends to move out even though she has most of her one-year tenancy left. She said that while she’ll try to rerent the apartment, it is up to me, primarily, to rerent the apartment because as landlord I am responsible for minimizing my own damages.
So far, she has paid her rent and remains in the apartment, even though she is telling me she will be out by the end of the month. Who has the responsibility for finding a new tenant for her apartment?
A–Most probably, you both have that responsibility, although the tenant probably has the greater responsibility at this time.
Under the law, the tenant remains liable for the obligations of her lease, whether or not she has decided to move from the apartment. Once she signed the lease, she became obligated by its terms, and the landlord should not suffer a loss simply because the tenant has decided to make a change. An exception may be if the tenant is moving out because of some condition that you have the obligation to remedy–such as inadequate heating in the apartment–although that does not appear to be the case in this situation.
Under the law, if a tenant chooses to move from an apartment, it is up to him or her to find a replacement tenant. The existing tenant also has the obligation to pay the rent until the replacement tenant begins paying rent. In addition, if the replacement tenant does not pay all of the rent, or if the replacement tenant defaults on the lease altogether, the original tenant must again pay the rent and keep it current and the lease in good standing.
If the tenant defaults, by failing to pay the rent and by abandoning the apartment without finding a replacement tenant, the landlord has the duty, under the law, to mitigate his or her damages. This means the landlord is obligated to attempt to find a replacement tenant to minimize the losses that he or she otherwise would sustain. The tenant remains responsible for the rent until the replacement tenant is found and is responsible for the costs and damages that the landlord sustains in identifying a replacement tenant.
You should note that the landlord is not required to find a replacement tenant for this apartment before filling other apartments the landlord also has available. However, it is safest to show a prospective tenant all vacant units, or inform the prospect of all of the available units that meet his or her criteria, and to allow the prospect to decide which unit to rent.
In your situation, you probably should start marketing this tenant’s apartment, although you probably do not yet have the responsibility to do so. It appears that, at this time, your tenant is not in default of her lease, because she has paid the rent and continues to occupy the apartment. Therefore, your duty to mitigate damages probably has not yet been created.
Once the tenant moves out, however, you will have to begin marketing the apartment, because you cannot simply sit back and allow the tenant to continue paying the rent. That is because if the tenant does go into default, and you have not taken any steps to remedy the situation and mitigate your potential damages, your right to collect against that tenant may be disallowed.
The obligation of a tenant who is leaving continues only so long as you are making a good-faith effort to minimize the damages you will sustain. Because you know your tenant is moving–even though there is no default–you are best off starting your marketing efforts now, so that you may be able to locate a replacement tenant as soon as possible. And by acting now, you have the greatest chance of maintaining your right to collect against the tenant if she does not keep up with her obligations under the lease.
Q–I live in a small apartment building in Chicago, and the owner originally lived in the building. A few months after I moved in, the landlord moved out of the building and into a home. If the landlord moved out after my lease was signed, does he still have to pay interest on my security deposit and follow the city’s ordinance?
A–There is nothing within the city’s ordinance that governs a situation where a landlord moves into our out of a building, whereby the building moves into or out of the ordinance’s jurisdiction. However, the ordinance does provide guidelines as to when a building is governed by the ordinance.
Under the city ordinance, an owner-occupied building of six or fewer units is not subject to the ordinance. A conservative interpretation would be that while the owner of such a building is living in the building, it is not governed by the ordinance. Once he moves out of the building, it is no longer owner-occupied, and therefore the ordinance would be in effect.
It is possible that a building can change to or from being subject to the ordinance several times if you live in the building long enough. The owner moving in or out of the building, coupled with the sale or multiple sales of the building can change its status in relation to the ordinance.
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Robert A. Boron, a Chicago attorney who specializes in leasing matters, writes about landlord and tenant issues for the Tribune. Questions to him can be addressed to Rental Q&A, Your Place section, Chicago Tribune, 435 N. Michigan Ave., Chicago, Ill. 60611. Sorry, but he cannot make personal replies.
