Mitigation Under a Commercial Lease

There are still jurisdictions, including the State of New York, where the law does not impose upon the landlord of a commercial lease the obligation to mitigate its damages upon a default by the tenant, at least in circumstances in which the landlord is not contractually obligated to mitigate. Holy Properties Limited, L.P. v. Kenneth Cole Productions, Inc., 661 N.E.2d 694 (N.Y. 1995) is the dispositive case on this issue of law in the State of New York. In affirming that the landlord was not obligated to mitigate damages, the court adverted to the traditional distinction between leases, which were historically considered conveyances of interests in real property, as opposed to executory contracts, for which the law imposed an obligation to minimize injury for a breach.