A business that leases real estate and improvements (buildings, etc.) in the form of space for offices, a warehouse, a restaurant, a nail or hair salon, a clothing store, a coffee shop, or other commercial (nonresidential) space will usually be required to sign a written contract known as a commercial lease agreement.
If the tenant (the business occupying the space) who signs a commercial lease agreement fails to pay the rent or continues to use the leased premises for a purpose other than as permitted by the lease agreement (after receiving notice of the improper use), the landlord may have the right to terminate the lease and lock the commercial tenant out of the space by changing the locks.
A commercial landlord’s ability to lock a commercial tenant out of the leased premises—sometimes referred to as one of the landlord’s self-help options or remedies because the landlord may be able to exercise these rights without going to court—depends on the specific language in the written lease agreement and the state's contract law.
For example, a state's contract law may determine if any breach of the lease agreement by the tenant was a material breach that might justify an extreme measure such as changing the locks.
Contract law in most states recognizes an implied duty of good faith and fair dealing between parties to a contract, and a commercial landlord who changes the locks on the leased premises because the tenant is a few days late paying the rent may be in breach of the landlord’s implied duty of good faith and fair dealing.
In California, a commercial lease agreement is a binding contract between a landlord and a tenant for the rental of nonresidential property, such as office spaces, warehouses, or retail locations. Should a tenant fail to pay rent or use the property in a manner not allowed by the lease, the landlord may have the right to terminate the lease. However, the landlord's ability to lock out a tenant by changing the locks, a form of self-help remedy, is subject to the terms of the lease agreement and California law. California generally discourages self-help measures and prefers that landlords go through the judicial process to avoid wrongful eviction claims. The state's contract law includes an implied covenant of good faith and fair dealing, which requires both parties to act in a manner that does not destroy the right of the other party to receive the benefits of the contract. A landlord who hastily changes the locks without proper notice or legal proceedings may be found in violation of this covenant, especially for minor lease infractions. It is advisable for landlords to seek legal counsel before taking such actions to ensure compliance with California law and to avoid potential legal disputes.