Washington commercial landlord’s duty to mitigate damages if tenant vacates prematurely.

If a tenant vacates prematurely, a landlord can mitigate damages by re-letting the premises, or sometimes even through a sale.  The Washington residential landlord’s duty to mitigate is codified in the comprehensive Residential Landlord-Tenant Act (“RLTA”), RCW 59.18, specifically at RCW 59.18.310.  But what about the Washington commercial landlord?

The commercial landlord / tenant relationship in Washington, including the allowable damages following premature surrender by a tenant, is not governed by a comprehensive legislative scheme like the RLTA.  The commercial landlord’s damages are still governed by contract and the caselaw.  And the caselaw on the topic, although sparse, does seem to impose on the commercial landlord a duty to mitigate.  See e.g. An Exeter Co. v. Samuel Martin, Ltd., 5 Wash.2d 244, 105 P.2d 83 (1940) (honest and reasonable effort to re-let required of the landlord). 

At least one leading Washington legal practice guide agrees with the proposition that Washington imposes on commercial landlords a duty to mitigate following tenant surrender. See § 6.86. Termination by surrender, 17 Wash. Prac., Real Estate § 6.86 (2d ed.) (“Whatever it is called, it is all but certain that Washington generally requires the landlord to make reasonable attempts to re-let if he wishes to charge the tenant with payment of rent after the tenant abandons.”).

The landlord’s duty to mitigate is also, arguably, built-into the caselaw test for damages.  In Washington, under the caselaw, a breach of contract is actionable only if the breach “proximately causes damage to the claimant.”  Nw. Indep. Forest Mfrs. v. Dep't of Labor & Indus., 78 Wn. App. 707, 712, 899 P.2d 6, 9 (1995).  If a landlord fails and refuses to re-let the premises, it can be argued the abandoning tenant was not the proximate cause of the lost rent. 

Whether the landlord’s efforts to re-let were reasonable, as with any reasonableness test, depends on the facts and circumstances.  Landlords who are seeking to preserve a deficiency judgment against a vacating tenant can benefit from the advice of Washington counsel as to the appropriate mitigation efforts.  A tenant facing a claim for unpaid rent accruing after surrender can benefit from the same advice.  If the landlord’s mitigation efforts were not reasonable, a tenant defense to the claim can be crafted.