SJC Rules That Commercial Landlord Cannot Recover Future Rent Until End of Lease Term

Today, the Massachusetts Supreme Judicial Court determined that a commercial landlord cannot recover the present value of lost future rent before the end of the lease term, absent specific language in the lease indemnification clause stating otherwise.  This is the law despite the fact that the property was relet to another tenant for the duration of the lease term.  The court also reasoned that once the landlord terminated the lease for breach, there is no common law entitlement which gives the landlord post termination damages. And in good news for guarantors of leases, the liability of the guarantor cannot exceed the liability of the tenant, and therefore cannot be determined until the end of the original lease term. This is despite a provision in the lease which provided for joint and several liability.  The case portends redrafting of commercial leases to allow for immediate damage calculations, and will allow tenants to plan accordingly.  The case is 275 Washington Street Corp., Trustee vs. Hudson River International, SJC-11217 (April 30, 2013).