Space re-leased in four months
Guarantor paid a fraction
Dim Sum Shop Closed Early, and the Landlord Sought Three Years of Rent Over $200,000. The Unit Was Re-leased in Four Months, and the Guarantor Paid Only a Fraction
Background
Ms. Z ran a dim sum shop in a small plaza in the San Gabriel Valley under a five-year lease, and she signed a personal guaranty. In the second year, foot traffic never picked up. She told the landlord in advance and returned the keys. Two months later the landlord sued her company and her personally, seeking the remaining three years of rent and common area charges, more than $200,000 in total.
Challenges
- She was the party that breached first, and the guaranty included a waiver of various defenses.
- After she moved out she stopped managing the space, and she had no evidence of her own.
Strategy
- We did not dispute whether she had breached. We disputed how much she owed. A departing tenant does not leave the landlord free to hold the space empty and collect the full rent. The landlord had to make reasonable efforts to re-lease, and losses that could have been avoided cannot be charged to the tenant.
- In March 2026 we obtained the landlord's leasing records and the new lease. The unit was rented to a bubble tea shop four months later, at a slightly higher monthly rent than Ms. Z's. The landlord's actual loss was four months of vacancy plus one brokerage fee.
- We requested two years of common area charge statements and found that costs for the plaza's exterior wall renovation had been included. The lease did not allow those costs to be passed to tenants, so the amount Ms. Z overpaid could be offset.
- We did not challenge the guaranty head-on. The guarantor's liability was limited to what the tenant owed, so reducing the tenant's account also reduced her personal exposure.
Case Timeline
| Date | Milestone |
|---|---|
| October 2025 | Ms. Z returned the keys and ended operations early |
| December 2025 | Landlord sued the company and the guarantor |
| March 2026 | Evidence gathered; new lease and common area charge details obtained |
| June 2026 | Parties agreed to private mediation |
| Early September 2026 | Settlement paid in full; landlord dismissed the case |
Outcome
In June the parties agreed to mediate. The landlord's attorney reviewed the new lease and accepted less than 15% of the original demand. The settlement was paid in early September, and the landlord dismissed the case. Of the more than $200,000 claimed, Ms. Z ultimately paid only a fraction.