The past half century has seen sweeping changes to the legal regime applicable to the landlord-tenant relationship, particularly for residential properties. The ancient feudal conception of a lease as a present transfer of an interest in land has given way to a more modem understanding of leases as contracts between a provider of a package of goods and services and their consumer. Among the changes wrought by this conceptual shift has been the imposition of previously unknown obligations on landlords in the event of tenant abandonment. Called either the duty to mitigate or, perhaps more accurately, the avoidable consequences rule, the rule requires a landlord seeking recovery of damages from a defaulting tenant who has abandoned possession to establish that he has made reasonable efforts to minimize the damages flowing from the tenant's abandonment. This is a departure from the traditional rule that a landlord could, if he chose, allow property abandoned by a tenant during the term of a lease to sit vacant and idle, and still hold the tenant liable for the full rent due under the lease for the entire term thereof. A recent survey reports that the District of Columbia and all but six states have adopted this rule by statute or judicial decision in the four decades since it first entered the American legal landscape. New York has been a studied exception to this trend. For decades, the lower courts in the state have variously imposed and rejected the landlord's duty to mitigate, at least in the context of residential leases. This unsettled situation came to an apparent end in the summer of 2008, when the Appellate Division, Second Department, of the New York Supreme Court handed down its decision in the case of Rios v. Carrillo. That case sided with those lower courts that had held that residential landlords have no duty to mitigate, and in so doing, effectively imposed the traditional no-mitigation rule statewide for the foreseeable future.
This Article argues that the Rios decision is worthy of criticism, but not because imposing a duty to mitigate on landlords is necessarily the best rule for every dispute arising out of a residential tenant's abandonment. Rather, Rios is bad law because it is the product of an unfortunate confluence of a poorly framed legal issue, a poorly organized judicial hierarchy, and an economically diverse jurisdiction. Rather than argue the merits of the traditional or modem positions on the legal question of landlord mitigation in the abstract, this Article argues that courts in New York have traditionally responded to residential tenant abandonment by weighing the equities and the good faith of the parties in each case, and that they should continue to do so. Rios forecloses this type of factually sensitive inquiry on the part of trial courts, creating incentives for undesirable strategic behavior by landlords.
This Article proceeds as follows: Part I analyzes the cases in this area of landlord-tenant law and identifies trends in the doctrine leading up to the decision in Rios—chief among them a sensitivity of courts to the particular equities of the parties before them—and situates Rios as a natural result of these trends. Part II discusses the features of the New York Unified Court System that allow Rios, while consistent with pre-existing trends in the case law, to upend those trends and eliminate the equitable sensitivity that has characterized residential tenant abandonment cases in New York. Part III demonstrates the likely effects of this shift in the law by reference to demographic data on housing characteristics in the downstate region. Part IV concludes with a critique of Rios, not simply as a wrongly decided case, but as an example of how things can go wrong in a common-law system of adjudication.