Q: Lease agreement contract
If I sign a lease that states I am required to pay $3100 for early move out, plus paying rent for the other months left in the term, can I fight that in court? Is it legally acceptable for a property management company (landlord) to make you pay rent for months in which you are not living at the property? Is it legally acceptable to force someone to pay such high fees as well?
A: Contract law imposes a duty to mitigate damages. So if you breached the agreement then technically you are responsible to pay rent for the months that you said you would in the contract. However, if the property management company is able to "re-rent" the place quickly then this would relieve of your duty to pay out the contract. They have to give a reasonable effort to mitigate damages, but you are also responsible for the additional expense of getting the place ready to rent, as well as marketing/qualifying expenses for the new tenant.
Sometimes, these fees can be hard to calculate so they will put in a "liquidated damages" clause in the agreement where you agree to pay a fixed sum if you breach the contract and that you agree it is fair and reasonable. Generally, Courts will hold you to the contract as long as the terms are so unfair that it would be termed unconscionable.
I am not sure that it is appropriate to put a liquidated damages clause in a rental agreement as the costs to "re-rent" do not seem that hard to calculate. You could push back on this and make them justify the $3,100 fee, but you probably won't get it down to $0. I hope this helps.
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