Can a landlord keep your deposit if they rented your space to a new tenant/renter at a lesser rate?

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Can a landlord keep your deposit if they rented your space to a new tenant/renter at a lesser rate?

I signed a year lease for my small business space and due to my family going through hardship I advised them that I would have to break my lease. I let them know by email and they advised me that I would have to advertise and find renter for space. I had someone who wanted to see the space but in the meantime the landlord advised me that they would like to help me and they found someone to rent the space for me. I was unaware that they had given them a price break. I left the space in great shape thinking I would get deposit and prorate but they took it for loss of rent paid by new tenant.

Asked on May 26, 2012 under Real Estate Law, Maryland

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Yes, if the landlord made reasonable efforts to re-let the space after you broke the lease, but had to rent it for less than you were paying, then for each month that would have been left on your lease, the landlord may hold you liable for the difference between the rent you were paying and the rent the new tenant pays. For example: say there were 8 months left on your lease and you were paying $3k per month. If the new tenant is only paying $2.4k per month, then you could be liable for a $600/month difference for 8 months, or $4,800.

While, as stated, the landlord does have to make reasonable efforts to re-let the space and must seek to get market-level rent, there are many reasons--such as the state of the local commercial real estate market--why the landlord might legitimately have to charge a new tenant less than you were charged.

If you are liable for unpaid rent or rent shortfalls, the landlord may take that out of your deposit.


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