In a breach of contract lawsuit we have a very interesting perspective of damages. We use the term "Benefit of the Bargain." That is to say that every contract has a presumed bargain for either party. Generally speaking, the benefit a landlord receives is renting an apartment for a year and the associated money. For a tenant the benefit is a habitable apartment for the amount of money they agreed to. It is important to understand that either side has a unique benefit that they are entitled to under contract law.
Tenant Breach
We have run into too many situations where a student in either unable or unwilling to assume the apartment that they have leased prior to moving in where the landlord threatens to sue for the entire amount under the contract. This is a completely inaccurate understanding of contract liability. Let's say the student gives notice two months prior to moving in that they are breaking the lease and not moving in.
First, the landlord has a duty to mitigate their damages. This means that they must make reasonable attempts to find alternative tenants. Now, if there is an advertising cost or background check fees, the student would be responsible for paying that. After all, one of the benefits the landlord attained in the contract was that the space they had to rent was rented. They shouldn't have to pay the marketing charges again. So there's the first part of our damages, the money reasonably associated with finding a suitable replacement tenant.
Second, the landlord is entitled to rent each month in the amount agreed to. Let's say the apartment stays empty for one month into the original lease term and they have to reduce the rent rates by $100 to find a suitable alternative. In that case the student would owe one month rent and eleven months of difference in rent, here $1,100. But the whole year worth of rent is not being lost, only a minor portion so that the landlord gets the benefit they bargained for without double dipping.
First, the landlord has a duty to mitigate their damages. This means that they must make reasonable attempts to find alternative tenants. Now, if there is an advertising cost or background check fees, the student would be responsible for paying that. After all, one of the benefits the landlord attained in the contract was that the space they had to rent was rented. They shouldn't have to pay the marketing charges again. So there's the first part of our damages, the money reasonably associated with finding a suitable replacement tenant.
Second, the landlord is entitled to rent each month in the amount agreed to. Let's say the apartment stays empty for one month into the original lease term and they have to reduce the rent rates by $100 to find a suitable alternative. In that case the student would owe one month rent and eleven months of difference in rent, here $1,100. But the whole year worth of rent is not being lost, only a minor portion so that the landlord gets the benefit they bargained for without double dipping.
Landlord Breach
Of the multiple ways a landlord may break the lease that we've discussed, there are some predictable damages and a few hidden ones. The basic benefits a tenant has bargained for are an apartment of a general size and accommodations for a specified amount of rent. For this example we have a two bedroom with basic appliances that's close to an specific area of the city for $1,000/mo. If the landlord breaches the terms of the lease in a material fashion they are responsible for what it will take for the tenant to find a similarly situated apartment for the same price. Let's review the last example that happened to a student recently.
The student signed a lease in January to move to the city for school. On the lease form nearly every major appliance was marked as being provided by the landlord which made the selection of that particular apartment especially appealing. She even went so far as to confirm the details with the leasing agency prior to moving in which they confirmed. However, when she moved in only the basic appliances of stove, refrigerator, and microwave were provided. In response to this the leasing agency informed her that they would either take $25.00/mo. off her rent for what they referred to as clerical errors or else she would have to leave and have to pay them three months' rent as a termination fee.
Let's consider some of their liability. Let's say our new student friend decides to find a new place immediately but that there are considerable out-of-pocket expenses to moving so fast. Predictably, a similarly situated apartment that has all the additional appliances and features that were advertised and available on short notice costs considerably more than the original location. For sake of our illustration here let's say the original rent amount was $1,000/mo. and the replacement apartment costs $1,300/mo. and she was only one month into the lease. Additionally, let's say that taking a week off of work to box up the apartment and hiring a moving company to relocate her costs our student $2,000.00. Our baseline of damages are the $300 x 11 = $3,300 plus $2,000 = $5,300.
We keep referring to the Unfair Trade Practices and Consumer Protection Law for a reason. Yes, the law is typically applicable and is expressly allowed in housing situations but that is not why we are emphasizing its use. The law affords attorneys fees in successful lawsuits. This means that tenants that would otherwise never have the benefit of counsel since the average damages they sustain is between $500 and $2000 and hiring a lawyer would cost as much if not more. We want to increase accessibility to justice and that's what the UTPCPL is all about. Remember, if the landlord or their agents lie they are liable to be punished up to three times the amount of baseline damages, court costs, and attorneys fees. In our example here that number looks like $15,900 plus costs and attorneys fees.
Before your eyes get too big with images of civil litigation complaints dancing around in your head remember, the law is about justice and fairness not windfalls of getting rich quick. No judge that I know would be inclined to award a large amount of money unless they felt it was necessary to prevent the kind of actions that took place in the case before them from happening again. Rather, the judges that I know want to be as fair and balanced as possible, within the law, which means understanding that clerical errors probably wouldn't demand an award of three times baseline. They may be inclined to award reasonable attorney fees in a case like this and maybe a slight penalty for the aggressive demands of the leasing agency once the error was discovered.
This is certainly a lot to take in but in an attempt to summarize: In contract law the non breaching party is entitled to be placed in as good a position as if the breach had never occurred at the expense of the breacher.
The student signed a lease in January to move to the city for school. On the lease form nearly every major appliance was marked as being provided by the landlord which made the selection of that particular apartment especially appealing. She even went so far as to confirm the details with the leasing agency prior to moving in which they confirmed. However, when she moved in only the basic appliances of stove, refrigerator, and microwave were provided. In response to this the leasing agency informed her that they would either take $25.00/mo. off her rent for what they referred to as clerical errors or else she would have to leave and have to pay them three months' rent as a termination fee.
Let's consider some of their liability. Let's say our new student friend decides to find a new place immediately but that there are considerable out-of-pocket expenses to moving so fast. Predictably, a similarly situated apartment that has all the additional appliances and features that were advertised and available on short notice costs considerably more than the original location. For sake of our illustration here let's say the original rent amount was $1,000/mo. and the replacement apartment costs $1,300/mo. and she was only one month into the lease. Additionally, let's say that taking a week off of work to box up the apartment and hiring a moving company to relocate her costs our student $2,000.00. Our baseline of damages are the $300 x 11 = $3,300 plus $2,000 = $5,300.
We keep referring to the Unfair Trade Practices and Consumer Protection Law for a reason. Yes, the law is typically applicable and is expressly allowed in housing situations but that is not why we are emphasizing its use. The law affords attorneys fees in successful lawsuits. This means that tenants that would otherwise never have the benefit of counsel since the average damages they sustain is between $500 and $2000 and hiring a lawyer would cost as much if not more. We want to increase accessibility to justice and that's what the UTPCPL is all about. Remember, if the landlord or their agents lie they are liable to be punished up to three times the amount of baseline damages, court costs, and attorneys fees. In our example here that number looks like $15,900 plus costs and attorneys fees.
Before your eyes get too big with images of civil litigation complaints dancing around in your head remember, the law is about justice and fairness not windfalls of getting rich quick. No judge that I know would be inclined to award a large amount of money unless they felt it was necessary to prevent the kind of actions that took place in the case before them from happening again. Rather, the judges that I know want to be as fair and balanced as possible, within the law, which means understanding that clerical errors probably wouldn't demand an award of three times baseline. They may be inclined to award reasonable attorney fees in a case like this and maybe a slight penalty for the aggressive demands of the leasing agency once the error was discovered.
This is certainly a lot to take in but in an attempt to summarize: In contract law the non breaching party is entitled to be placed in as good a position as if the breach had never occurred at the expense of the breacher.