Landlord/Tenant — Commercial Lease – Abandonment – Landlord’s Damages

Listen to this article

Bluffton Towne Center, LLC v. Gilleland-Price (Lawyers Weekly No. 011-036-15, 16 pp.) (H. Bruce Williams, J.) Appealed from Beaufort County (Marvin Dukes III, Master-in-Equity) S.C. App.

Holding: After occupying the leased premises for some time, the defendant-tenant abandoned the premises and returned the keys to the plaintiff-landlord. Since the parties’ lease provided that, upon the tenant’s default, the landlord could take possession of the premises without losing its right to recover all damages resulting from the tenant’s breach, the landlord could recover future rent from the tenant, among other damages.

We modify and affirm the master-in-equity’s decision in favor of the landlord.

Because the tenant sent the landlord a March 28, 2010 email saying she had “vacated the unit at the beginning of February,” and because she returned the keys to the landlord in April 2010, the master properly concluded that the landlord terminated the subject lease upon the tenant’s abandonment by re-entering and re-letting the premises.

While the master erred in concluding that Simon v. Kirkpatrick, 141 S.C. 251, 139 S.E.2d 614 (1927), was overruled by U.S. Rubber Co. v. White Tire Co., 231 S.E. 84, 97 S.E.2d 403 (1956), the master properly held that the landlord was entitled to recover future rents as damages under the theories of both Simon and U.S. Rubber.

Simon remains valid law. In that case, the lessee never took possession of the leased premises, and the default provision of the lease did not reserve the lessor’s right to both take possession and collect future rents.

Unlike the provision at issue in Simon, the provision in the lease here expressly reserved the landlord’s right to recover all damages resulting from the tenant’s breach after it re-entered the premises.

Simon and U.S. Rubber are not mutually exclusive and may be read together.

Although the landlord-tenant relationship was terminated by the tenant’s abandonment and the landlord’s re-entry and re-letting of the premises, this sequence of events did not affect the tenant’s contractual liability to the landlord under the lease. The master properly concluded that the landlord was entitled to damages measured by the amount the landlord would have received as rent for the remainder of the tenant’s term had there been no default, less the amount of rent the landlord received from the two subsequent tenants it acquired in an effort to mitigate damages.

The lease said the landlord could re-enter and repossess the property without prejudicing its right to damages. The lease did not define “damages,” so the master looked to the four corners of the lease to determine the parties’ intent.

The lease said the tenant was required to pay all costs, damages, and expenses the landlord suffered by reason of her default. The default provision made clear that, upon termination of the lease, the tenant was not relieved of future obligations for damages resulting from her breach of the lease.

The parties clearly intended that, upon default, the tenant would be liable to the landlord for the rents due during the full term as damages.

After determining that the lease was unambiguous, the master erred in admitting extrinsic evidence in the form of correspondence between the parties. Nevertheless, this error was harmless since the master’s interpretation – based on the extrinsic evidence – was consistent with the lease’s language.

Affirmed as modified.