Landlord is entitled to retain prepaid rent after tenant fails to take possession Missouri-An appellate court overturns a lower court's decision awarding the tenant a full refund of prepaid rent. A prospective tenant agrees to rent the landlord's rental vacation condominium in Florida. The tenant enters into a one month oral lease agreement and gives the landlord a $290 security deposit, plus $2,900 in prepaid rent and is given the keys. Two days before the rental period is to begin on Feb. 5 the tenant advises the landlord he cannot use the vacation condominium because of medical problems. The tenant requests a full refund but only receives the $290 security deposit. The landlord is unable to find another tenant to fill the February time period. The tenant sues for return of the prepaid rent. The trial court awards judgment in favor of the tenant for return of a small portion of the prepaid rent and the tenant appeals. On appeal, the court affirms the judgment for $517.95 in favor of the tenant because the landlord took possession of the property for five days to make routine repairs and maintenance at the end of the original rental period. The tenant argues on appeal that he (1) never entered into a lease, but instead entered into a license allowing him to enter the premises for a specific purpose, and that (2) a landlord/tenant relationship was never established between him and the landlord. The court disagrees and determines there is in fact a valid lease because the tenant is entitled to exclusive possession of the property for a definite period of time. A landlord/tenant relationship is created when there is (1) a reversion in the landlord; (2) a creation of an estate in the tenant which is either at will or for a term less than what the landlord holds; (3) there is a transfer of exclusive possession and control of the tenant; and (4) there is a contract. The court rules that all four elements are present in this case. The tenant also argues that the lease agreement was never executed because he never took possession and should not be held liable for the rent. However, in this state (as in most) the mere non-possession of the property by the lessee does not relieve the lessee of liability under the lease. The tenant's remaining argument is that the landlord is not be entitled to retain prepaid rent. The court points out that a landlord has three options following a default by a tenant: (1) the landlord may remain out of possession and treat the term as subsisting and sue for lost rent; (2) give proper notice to the tenant, take possession, and mitigate damages- and the tenant remains liable for any loss; or (3) take possession with notice and terminate the lease agreement. In this case, the landlord chooses to remain out of possession and treat the term as subsisting. The landlord also tries to mitigate the damages by locating another tenant for the month. The landlord is entitled to sue for lost rent, or as in this case, retain that portion of prepaid rent the tenant would have been obligated to pay had he taken possession as agreed. Joseph Kimack, Plaintiff / Appellant, v. Jerry E. Adams and Kathy Adams, Defendants / Respondents. 930 S.W.2d 505 (Mo.App. E.D. 1996). | 
