Reichman and Dunn v Beveridge Gauntlett [2006]

Landlords are not under a duty to mitigate their loss (rent arrears) by finding a new tenant where the existing tenant has vacated the premises but has not surrendered the tenancy. A firm of solicitors was the tenant of offices, with a term of five years from January 2000. In February 2003 the firm ceased to trade, so no longer had a need for the office premises. The firm did not pay the rent due in March 2003, or the water rates that were due after that date. In January 2004, the landlord brought proceedings against the firm’s partners for rent arrears. The partners argued that the landlords had not mitigated any loss that might arise from the tenants’ nonpayment of rent, which they could have done by finding a new tenant. It was contended that the landlords were fully aware of the plight of the firm which led to their ceasing to practise as solicitors, ‘but failed to forfeit the lease in order to mitigate their own loss’. The partners said that the landlords’ agent had indicated that they would accept the offer of someone who was their tenant of other premises to take a new lease of the firm’s premises, but had then said that they would not accept this. They argued that the landlords had failed to instruct agents to market the premises, to  accept the offer of a prospective tenant who wanted to take an assignment or a new lease and to accept an offer from one of the partners to negotiate payment in order for the firm to surrender its lease.