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 Oregon, a commercial lease agreement is a binding contract between a landlord and a tenant for the rental of nonresidential property. If a tenant fails to pay rent or uses the property in a manner not permitted by the lease, the landlord may have the right to terminate the lease. However, Oregon law requires landlords to follow specific procedures before evicting a commercial tenant, including providing proper notice. The landlord's right to lock out a tenant, known as a 'self-help' remedy, must be explicitly stated in the lease agreement. Even if the lease allows for self-help, Oregon courts generally discourage this practice and landlords are advised to proceed with caution. Locking out a tenant without following legal procedures or for a minor lease violation could be seen as a breach of the implied duty of good faith and fair dealing inherent in all contracts. Therefore, landlords should typically seek a court order to evict a commercial tenant to avoid potential legal repercussions.