## Facts

- A jewelry-store tenant leased space in an Illinois shopping mall beginning in 1978.
- In late 1984, an adjacent audio-video tenant began operating next door, sharing a common wall; demonstrations allegedly caused loud noise and vibrations affecting the jewelry store.
- The jewelry-store tenant repeatedly complained to mall ownership/management; soundproofing measures were attempted but did not materially reduce the noise.
- In 1985, a new owner acquired the mall and hired a management company to handle leasing and rent collection.
- In 1986, while aware of the ongoing noise problem, the jewelry-store tenant entered a new six-year lease requiring continuous operation and restricting operation of a similar business within five miles.
- The noisy adjacent tenant vacated in February 1990, ending that source of interference.
- The jewelry-store tenant stopped paying rent in July 1990 and vacated in August 1990, before lease expiration, then opened a competing store within the restricted radius.
- The landlord and manager sought a replacement tenant and relet the space within about seven months, at a lower rent.

## Issues

1. Whether the tenant could assert constructive eviction based on excessive noise, or instead waived the claim by remaining in possession for an unreasonable time and by signing a new lease with knowledge of the condition.
2. Whether the landlord failed to mitigate damages after the tenant’s abandonment, affecting recovery for unpaid rent and related lease amounts.

## Decision

- The appellate court reversed the judgment for the tenant and remanded.
- The court held that the tenant waived any constructive-eviction claim by staying in possession for an unreasonably long period after the complained-of condition arose and by entering a new lease despite knowledge of the condition.
- The court held the landlord took reasonable steps to mitigate damages by attempting to relet and successfully reletting the premises within about seven months, even at a reduced rent.

## Legal Principles

- A tenant claiming constructive eviction must vacate within a reasonable time after the premises become untenantable due to the landlord’s breach.
- Continued possession for an extended period, particularly coupled with entering or renewing a lease while aware of the condition, is conduct inconsistent with constructive eviction and constitutes waiver.
- In commercial leasing, a landlord must take reasonable steps to mitigate damages after abandonment; reasonableness may include reletting at a lower rent when consistent with market conditions and good-faith efforts to reduce loss.

## Conclusion

The appellate court concluded the tenant’s prolonged occupancy and execution of a new lease despite known noise conditions waived constructive eviction, and it found the landlord’s reletting efforts within seven months at lower rent satisfied the duty to mitigate, requiring reversal and remand.


J.M.B. Props. Urb. Co. v. Paolucci, 237 Ill. App. 3d 563, 604 N.E.2d 967 (Ill. App. Ct. 3d Dist. 1992)