Q: My husband and I are in a situation with previous tenants of our rental home in Hennepin County. The tenants moved in at the end of August, stayed a few days, then left the property without going through the proper protocol, and with no lease termination signed. We finally had a new renter sign a short-term lease for November through February. We sent the previous tenants a demand letter for unpaid rent but we know that, under Minnesota law, there is no requirement to mitigate damages. Are the previous tenants obligated to pay the rent from March through August after the short-term tenant's lease ends, or did signing the short-term lease with a new tenant terminate the previous tenants' responsibility to fulfill their full lease term?
A: In Minnesota, unlike many states, a landlord does not have a duty to mitigate damages by finding a new tenant to replace a previous tenant who has broken the lease. Landlords here can choose to leave the unit open, but must act as though the lease continues. Then they can sue the previous tenant, who broke the lease, for the unpaid rent.
Most landlords in Minnesota do not leave the unit empty, but instead look for new tenants; often it's too hard to track down the previous tenant and collect the rent owed on the lease. Since you've mitigated your damages by replacing the tenants, your previous tenants still can be sued for each month they owed on their lease when you didn't have any tenants paying rent (September, October and March through August.) However, if you find a new tenant to cover March-through-August rent, then you can sue your previous tenants only for the September and October rent that went unpaid. In other words, if you mitigate your damages, such as you did, you cannot collect double rent by having a new tenant pay you rent, and then going after your previous tenants for rent during those same months.
Also, if the monthly rent was $1,300, but you couldn't find a new tenant to pay that price, then you may lower the rent. If you find a new tenant who will pay $1,000 a month, then you have an argument for recovering the difference, which is $300 per month. Signing the short-term lease with a new tenant does not terminate your previous tenants' responsibility to pay rent owed on their lease for the months during which you had no tenant in their unit paying rent.
Renting without lease
Q: I'm wondering if a person has a right to rent out houses, without a lease, if the houses are up to state code, or if renting out a house without a lease is illegal?
A: In Minnesota, a lease doesn't have to be in writing in order to be considered a lease. All rental situations in Minnesota are covered by a lease and rental housing state laws, even when there is no written lease. If the owner or landlord's rental building is 12 units or larger, or if the oral contract runs longer than one year, then that lease must be in writing. Otherwise, it is legal to rent out houses in Minnesota without a written lease. An estimated 5 to 15 percent of leases throughout the state are confirmed with a handshake and never written down.
If a written lease is required because the building contains 12 or more units, or the contract runs over one year, then it can be as simple as a handwritten agreement on anything, including a napkin. Leases tend to favor landlords, since they are drafted by them or at their direction in order to protect their interests. What isn't written down in the lease is governed by state law, which tends to protect tenants. The best solution is to have a lease that protects the landlord while still being fair to the tenant.
Kelly Klein is a Minneapolis attorney. Participation in this column does not create an attorney/client relationship with Klein. Do not rely on advice in this column for legal opinions. Consult an attorney regarding your particular issues. E-mail renting questions to firstname.lastname@example.org, or write to Kelly Klein c/o Star Tribune, 650 3rd Av. S., Minneapolis, MN 55488. Information provided by readers is not confidential.