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premises when a tenant vacates in breach of the lease but believe that the tenant properly bears the burden of proof
does not require the landlord to fill the premises with any to demonstrate that the landlord has mitigated or failed to
willing tenant. Austin Hill Country Realty, Inc., 948 S.W.2d mitigate damages, and the amount by which the landlord
293 (Tex. 1997). Further, the Texas Supreme Court has reduced or could have reduced its damages.”) (Later
stated that a “landlord is not required to simply fill the codified in Tex. Prop. Code § 91.006). 2
premises with any willing tenant; the replacement tenant Although the landlord has to use “objectively reason-
must be suitable under the circumstances”. able” efforts to fill the leased premises when a tenant va-
Though the landlord must mitigate damages after the cates in breach of the lease agreement, the Texas Supreme
tenant abandons the leased premises in violation of the Court has stated that “a landlord is not required to simply
terms of the lease, the tenant has the burden of proving that fill the premises with any willing tenant; the replacement
the landlord failed to mitigate damages and the amount tenant must be suitable under the circumstances”. Austin
by which the landlord reduced or could have reduced the Hill Country Realty, Inc. v. Palisades Plaza, Inc., 948 S.W.2d
damages. TEX.PROP.CODE ANN. §91.006(A) (Vernon 2007). 293, 299-300 (Tex.1997).
Additionally, a contention of failure to mitigate requires the Understanding the remedies afforded a commercial
tenant to plead the affirmative defense of failure to mitigate. landlord through Texas common law is important, as it
could provide the landlord with a much more impactful
Tenant Has The Burden to Prove Failure to Mitigate remedy than what was contracted for in the lease. Texas is
The tenant, not the landlord, bears the burden of proof generally considered a landlord-friendly state, and it is no
to show the landlord failed to mitigate damages as well different in this instance. The frequently elected remedy of
as the amount by which the landlord failed to reduce terminating possession and accelerating rent is a powerful
the damages. Austin Hill Country Realty, Inc. v. Palisades option. To be clear, the landlord, in that case, is terminat-
Plaza, Inc., 948 S.W.2d 293, 299-300 (Tex.1997). A suit for ing possession, not the lease. The lease is still in effect,
anticipatory repudiation, actual reentry, or a contractual though the tenant is no longer entitled to possession of
right of reentry gives rise to the landlord’s duty to miti- the leased premises. Rent is accelerated through the end
gate damages upon the tenant’s breach and abandonment. of the lease term, discounted to present value, and credit
Austin Hill Country Realty, Inc., 948 S.W.2d 293, 300 (Tex. is given for the difference in rents if the space is relet or
1997). Texas law is clear that the tenant has the burden the reasonable cash market value of the space if the space
of proof to show that the landlord failed to mitigate has yet to be relet. All the rent owed under the entire lease
damages, as well as the amount by which the landlord term immediately comes due, less the credits given for
failed to mitigate its damages. McGraw v. Brown Realty reasonable cash market value and the value of the security
Co., 195 S.W.3d 271, 277 (Tex.App.–Dallas 2006, no pet.) deposit on file if any. As long as the landlord has been
(Citing Austin Hill Country Realty, Inc. v. Palisades Plaza, using objectively reasonable efforts to relet the space, and
Inc., 948 S.W.2d 293, 299 (Tex.1997)). A landlord’s failure the tenant has not proven otherwise (i.e. landlord failed
to mitigate damages will prevent recovery by a landlord to use objectively reasonable standards to relet the space
“only to the extent that the damages reasonably could and the extent to which that damaged the tenant), then the
have been avoided”. Austin Hill Country Realty, Inc. v. landlord is entitled to a substantial value as a result of the
Palisades Plaza, Inc., 948 S.W.2d 293, 299-300 (Tex.1997). tenant’s failure to perform under the lease. N
A tenant attempting to affirmatively prove entitlement to
a reduction in damage due to a failure to mitigate must Brian D. Womac is a licensed attorney in Texas since 1985
prove two things—first, that there was indeed a failure to celebrating 36 years of active practice in commercial real
mitigate, and second, the amount which could have been estate law. He has been board-certified in commercial
mitigated. Palisades Plaza, Inc., 948 S.W.2d 293, 299 (“we real estate law for thirty (30) years (1991-2021) and has
personally handled over 3,000 litigation matters in Harris
County, Texas. His client base consists of corporations,
THE TENANT, partnerships, limited liability companies, lending

NOT THE LANDLORD, institutions, insurance companies, investors, management
and leasing companies, and others owning real estate.
bears the burden of proof Endnotes

to show the landlord failed 1. LendingTree analysis of U.S. Bureau of Labor Statistics data
to mitigate damages as well 2. After codification, Texas Courts continued to place the burden of proof on both
failure to mitigate and the amount damages that could have been reduced on the
as the amount by which the tenant. See, e.g., Cole Chemical & Distributing, Inc. v. Gowing, 228 S.W.3d 684, 687
landlord failed to reduce (Tex. App—Houston [14th Dist.] 2005, no pet.); White v. Harrison, 390 S.W.3d 666,
675 (Tex. App.—Dallas 2012, no pet.); Hoppenstein Properties, Inc. v. Schober, 329
the damages. S.W.2d 846, 849 (Tex. App.—Fort Worth 2010, no pet.).

16 NBIZ ■ August 2022