Q: Commercial tenant abandonment/early lease term. Are they legally responsible for remainder owed on lease (10 mos)?
Our tenant wrote us a letter stating they can no longer operate their business on our property and mailed it to us along with their key. Their lease agreement doesn't end till July 2022. On the lease it states all parties will not seek court action and will seek mediation /arbitration to resolve issues. Are they still responsible for remainder on lease and if so, what legal actions can I take?
A: Generally, a tenant is responsible for the full lease term, BUT the landlord must reasonably attempt to "mitigate" the damages. That means the landlord should try to rent out the space once the tenant has left. IF (the language in the lease is very important) the parties have agreed to give up the right to court action, and replaced it with arbitration, then arbitration should be initiated. If mediation is a prerequisite, typically a lease will specify that. Usually a party can not recover their costs and/or attorney fees if mediation is a prerequisite and they don't attempt to mediate before initiating arbitration.
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