California Civil Code Section 1951.2: Damages and Mitigation

California Civil Code Section 1951.2 turns a broken lease into a breach-of-contract claim and tells the court exactly how to price it. A landlord can recover four things: unpaid rent through the termination date, lost rent from termination through the date of judgment, future rent through the end of the original term, and other losses caused by the breach. Each category comes with its own rules, and two of them shrink by whatever the tenant can prove the landlord could have avoided losing by re-renting the unit.¹

When the Statute Applies

Section 1951.2 kicks in when the tenant’s right to possession ends because of the tenant’s own breach. In practice, that means nonpayment of rent, violation of a material lease term, or abandonment of the unit. Once the landlord terminates possession for breach, the claim stops being about monthly rent owed under a lease and becomes a damages claim for provable losses.

That shift matters. The landlord cannot simply demand the balance of the rent on the lease. The amount has to be calculated under the statute, with credits for income the landlord could have earned by re-renting and, for future rent, a mandatory discount to present value.

The Four Categories of Recoverable Damages

The statute carves the award into four pieces.

Unpaid rent earned before termination. Any rent the tenant owed but did not pay up through the date the lease was officially ended. This piece is usually not disputed.
Rent lost from termination through judgment, reduced by the amount the tenant proves the landlord could have reasonably avoided losing.
Rent that would have accrued after judgment through the end of the original lease term, again reduced by what the tenant proves could have been avoided, and discounted to present value. This category only applies if specific conditions are met.
Any other loss caused by the tenant’s breach, such as cleaning, repairs for damage beyond normal wear, advertising, and broker fees to secure a replacement tenant.

The first, second, and fourth categories are awarded at face value, with interest at the rate stated in the lease or, if the lease is silent, the default legal rate.¹

How Future Rent Is Calculated

Future rent gets special treatment because the landlord is being handed a lump sum today for money that would have come in month by month. The statute requires the court to discount that stream to present value using the discount rate of the Federal Reserve Bank of San Francisco plus one percentage point.¹ As of early 2026, that base rate sits at 3.75%, making the statutory discount rate 4.75%.²

The discount matters most on long leases. On a five-year commercial lease with three years remaining, the gap between face value and discounted value can run into tens of thousands of dollars. On a residential lease with only a few months left, the discount barely moves the number.

Future rent damages also come with a gatekeeper. A landlord can only recover under this category if one of two things is true: the lease itself contains a provision authorizing recovery of post-judgment damages, or the landlord actually re-rented the unit before trial and can show the efforts were reasonable and made in good faith.¹ If neither condition is met, the landlord keeps the other three categories but loses future rent entirely. A lease that is silent on this point can erase the biggest piece of a landlord’s claim.

There is an alternative. Instead of taking a discounted lump sum, a landlord can sue periodically as each month’s rent would have come due. That avoids the discount but requires repeat filings, which is rarely practical on a residential lease.

The Duty to Mitigate

Both the “termination to judgment” and “post-judgment future rent” categories shrink by whatever rental income the tenant proves the landlord could have avoided losing. The mitigation requirement is written directly into the damage formula.¹

Reasonable mitigation means treating the vacancy the way any other vacancy would be treated: advertising promptly, showing the unit, and pricing it at fair market rent. Pricing the unit above market to deter applicants, or simply leaving it off the market, hands the tenant a strong argument to cut the award.

The burden of proof sits on the tenant. A general complaint that the landlord “should have tried harder” is not enough. The tenant has to show, with specifics, that a replacement renter was available at a particular rent and that the landlord unreasonably failed to secure them. If the tenant proves the unit could have rented for $2,000 a month starting two months after move-out, that $2,000 comes off the claim for every month the replacement would have covered.

One point that trips up landlords: making mitigation efforts does not waive the right to collect damages. The statute protects the damages claim while simultaneously requiring the landlord to minimize the loss. Re-renting the unit is not an acceptance of the breach.

What Counts as “Other Losses”

The fourth category most often covers the cost of putting the unit back in rentable shape. Not every repair qualifies. California draws a firm line between tenant-caused damage and normal wear and tear from ordinary use.

Faded paint, minor wall scuffs, light carpet wear from foot traffic, and small nail holes from hanging pictures are normal wear. A landlord cannot bill the departing tenant for those. Damage beyond ordinary use is recoverable: holes punched in walls, stained or torn carpet, broken fixtures, pet damage such as scratched doors or urine-soaked flooring, unauthorized modifications, and excessive filth that requires professional cleaning.

Reletting expenses sit in this category too. Advertising costs, broker fees, and similar expenses to replace the tenant are recoverable because they would not have existed if the tenant had finished the term.

How a Security Deposit Changes the Number

A landlord holding a security deposit will usually apply it to the tenant’s outstanding obligations before suing for the balance. Under Civil Code Section 1950.5, a deposit can be used for unpaid rent, repairs for damage beyond normal wear, and cleaning to restore the unit to its move-in condition.³

Since July 2024, deposits are capped at one month’s rent for most landlords. Small landlords, defined as natural persons or all-member LLCs who own no more than two rental properties totaling four or fewer units, can collect up to two months’ rent.³ With caps that low, deposits rarely cover a full breach claim on a long lease. The deposit reduces the total; the landlord can still sue under Section 1951.2 for whatever is left.

Keeping the Lease Alive Instead

Section 1951.2 is not the only route. Under Civil Code Section 1951.4, a landlord can choose not to terminate and instead keep the lease in effect, collecting each monthly installment as it comes due, even if the tenant has abandoned the property.⁴ That approach sidesteps the present-value discount and the future-rent gatekeeper.

The catch: this remedy is only available if the lease gives the tenant the right to sublet or assign, even if the right is subject to the landlord’s reasonable approval. A lease that flatly bans subletting shuts the door on 1951.4, and the landlord has to proceed under 1951.2.⁵

How Long the Landlord Has to Sue

A landlord has four years from the date of the breach to file suit on a written lease, under Code of Civil Procedure Section 337.⁶ An oral rental agreement, less common but not unheard of, carries a two-year limit.

Four years is generous on paper. In practice, delay cuts against the landlord. The longer a unit sits empty without documented re-renting efforts, the harder it becomes to defend the mitigation record. The strongest claims come from landlords who re-rented promptly, kept records, and can show the court exactly what the breach cost after that effort.

1
California Legislative Information. California Civil Code 1951.2
2
Board of Governors of the Federal Reserve System. Discount Rate Minutes – January 2026
3
California Legislative Information. California Civil Code 1950.5
4
California Department of Real Estate. Landlord and Tenant
5
California Legislative Information. California Civil Code 1951.4
6
California Legislative Information. California Code of Civil Procedure 337