Mesilla Valley Mall Co. v. Crown Indus.

1991-NMSC-033, 111 N.M. 663, 808 P.2d 633

 

RULE:

In the absence of legal justification, a tenant who abandons occupancy before the expiration of a lease remains liable for rent for the remainder of the term; and, under traditional common-law property rules, the landlord is under no obligation to relet the premises to mitigate the tenant's liability under the lease. The landlord, however, may elect to retake possession on behalf of the tenant and to relet the premises for the tenant's account. Or, the landlord may choose to accept what is in effect the tenant's offer to surrender the leasehold, thereby terminating the lease and leaving the tenant liable only for rent that accrued before the acceptance.

FACTS:

After the lessee of space in a mall vacated the premises, the lessor allowed a museum to occupy the space free of charge in the interest of promoting good community relations. The lessor filed an action to collect all amounts due under the lease, but the trial court found that the lessee was relieved of all obligations. On appeal, the court affirmed, holding that there was substantial evidence to support the trial court's finding that the lessor's re-entry was for the lessor's own benefit and not for the benefit of the lessee.

ISSUE:

Does a lessor's acceptance of the leased premises upon the lessee's abandonment relieve the lessee from any further obligation?

ANSWER:

Yes.

CONCLUSION:

The lease provided that the lessor could relet the premises without terminating the lease, thus creating a presumption that any re-entry and reletting of the space was not the acceptance of a surrender of the lease. However, the lease also suggested that any reletting would benefit the lessee by providing that rents from any reletting would be applied against the tenant's debt for unpaid rent. Therefore, the reletting was for the lessee's benefit as well as for the justifiable ends of the lessor. By allowing the museum to use the premises, the lessor accepted the surrender of the lease, and the lease was terminated by operation of law.

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