Efforts to relet: Overview, definition, and example
What is efforts to relet?
"Efforts to relet" refers to the actions a landlord must take to find a new tenant when a current tenant breaks a lease or vacates a rental property early. It’s a term commonly used in commercial leases to outline the landlord's responsibilities in trying to fill the space again. Essentially, the landlord must make a reasonable attempt to re-rent the property to minimize the financial loss caused by the vacancy.
This concept ensures that landlords can’t just sit back and do nothing while a tenant is gone, leaving the property empty and still collecting rent from the old tenant.
Why is efforts to relet important?
Efforts to relet are important because they protect both the tenant and the landlord. For the landlord, it prevents them from unfairly holding the original tenant responsible for the full lease term if they’re actively trying to find a replacement. For the tenant, it gives reassurance that the landlord is not sitting on the property, refusing to re-rent it while continuing to demand payment.
The requirement to make reasonable efforts helps ensure that landlords act in good faith to find new tenants, avoiding unnecessary penalties for the original tenant.
Understanding efforts to relet through an example
Imagine you’re a tenant in a commercial space, and you need to break the lease early because you’re relocating. If you move out but the landlord doesn’t make an effort to find a new tenant, you could still be held responsible for rent payments until the lease term ends.
However, if the lease includes an "efforts to relet" clause, the landlord is required to actively try to find a new tenant. If they find someone, your financial responsibility for the remaining rent could be reduced, as the new tenant would cover those costs. The landlord may advertise the space, show it to potential renters, or list it with a real estate agent.
Example of an efforts to relet clause
Here’s what an efforts to relet clause might look like in a lease agreement:
“In the event of early termination of this Lease by the Tenant, the Landlord shall use reasonable efforts to relet the Premises at a fair market rent. The Landlord shall not be required to accept a tenant offering terms lower than the market rate or to relet to a tenant whose business conflicts with the nature of the building.”
Conclusion
Efforts to relet ensure that landlords take active steps to reduce financial losses when a tenant leaves early. For tenants, understanding this clause is key—it means the landlord can’t simply hold them to the full term of the lease without trying to find a new tenant.
By including an efforts to relet clause, both parties are clear on their obligations and responsibilities, helping prevent unnecessary disputes and ensuring fairness in case the tenant needs to leave before the lease ends. It’s all about balancing the interests of both the landlord and the tenant in the event of early termination.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.