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 New York, commercial lease agreements are binding contracts that stipulate the terms under which a business may rent commercial space, such as offices, warehouses, or retail locations. If a tenant breaches the lease, such as by failing to pay rent or using the space for unauthorized purposes, the landlord may have the right to terminate the lease. However, the landlord's ability to use self-help remedies, such as changing the locks to lock out the tenant, is limited. New York law generally disfavors self-help measures and landlords are typically required to go through the judicial process to evict a tenant. This means obtaining a court order before evicting the tenant. Additionally, under New York contract law, there is an implied covenant of good faith and fair dealing in every contract, 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 following the proper legal procedures may be found in breach of this duty. Therefore, it is crucial for landlords to adhere to the legal eviction process and for tenants to understand their rights and obligations under the lease agreement.