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legalgems
legalgems, Lawyer
Category: Legal
Satisfied Customers: 9988
Experience:  Just Answer consultant at Self employed
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My tenant has broken the lease, a cancellation agreement was

Customer Question

my tenant has broken the lease, a cancellation agreement was signed, one
JA: Because laws vary from place to place, can you tell me what state the property is in?
Customer: california
JA: Has anything been filed or reported?
Customer: no. a fee was paid, the house is re rented and now they want the fee back. is our agreement valid?
JA: Anything else you want the lawyer to know before I connect you?
Customer: thate it thanks
Submitted: 7 months ago.
Category: Legal
Expert:  legalgems replied 7 months ago.

Hello! I will be reviewing your question and posting a response momentarily; if you have any follow up questions please respond here. Thanks!

Expert:  legalgems replied 7 months ago.

Normally a CA landlord (LL) has a duty to mitigate damages, meaning that if a tenant breaks a lease and the LL re-rents it, the LL cannot "double dip" and cannot charge the tenant for unpaid rent for the period that rent was received from the replacement tenant.

However, there is an exception to this under Civil Code 1951.5:

1951.5.

Section 1671, relating to liquidated damages, applies to a lease of real property.

http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1951.5&lawCode=CIV

This provision allows the LL to charge a Liquidated damage provision should the tenant wish to exercise it:

1671.

(a) This section does not apply in any case where another statute expressly applicable to the contract prescribes the rules or standard for determining the validity of a provision in the contract liquidating the damages for the breach of the contract.

(b) Except as provided in subdivision (c), a provision in a contract liquidating the damages for the breach of the contract is valid unless the party seeking to invalidate the provision establishes that the provision was unreasonable under the circumstances existing at the time the contract was made.

(c) The validity of a liquidated damages provision shall be determined under subdivision (d) and not under subdivision (b) where the liquidated damages are sought to be recovered from either:

(1) A party to a contract for the retail purchase, or rental, by such party of personal property or services, primarily for the party’s personal, family, or household purposes; or

(2) A party to a lease of real property for use as a dwelling by the party or those dependent upon the party for support.

(d) In the cases described in subdivision (c), a provision in a contract liquidating damages for the breach of the contract is void except that the parties to such a contract may agree therein upon an amount which shall be presumed to be the amount of damage sustained by a breach thereof, when, from the nature of the case, it would be impracticable or extremely difficult to fix the actual damage.

http://leginfo.legislature.ca.gov/faces/codes_displaySection.xhtml?sectionNum=1671.&lawCode=CIV

It releases the tenant from further obligation, so for example if there was 10 months left on the lease, and the LL was unable to rent it, the tenant would not be liable after the liquidated damage was paid; similarly the tenant cannot request reimbursement if the LL is able to secure a tenant early.

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Information provided is for educational purposes only. Consultation with a personal attorney is always recommended so your particular facts may be considered. Thank you and take care.

Expert:  legalgems replied 7 months ago.

Hello again; just checking in to see how things worked out;
if you have further questions please don't hesitate to reach out to me here on Just Answer.
Thanks!