The tenant (the business occupying the space) who signs a commercial lease agreement is generally expected to be a more savvy, sophisticated, and informed tenant (also known as a lessee) than a tenant in a residential lease, and the law usually does not provide a commercial tenant with the same protections as residential tenant receives.

Because the law does not provide a commercial tenant with many protections, it is up to the commercial tenant to read, understand, and negotiate protections in a proposed lease agreement before signing it, as most every paragraph in a commercial lease agreement can have a significant impact on a business’s operations and financial stability.

Laws vary from state to state, but a commercial landlord’s ability to shut off a tenant’s utilities is usually determined by the terms of the lease agreement and the state’s contract law—to determine, for example, if any breach of the lease agreement by the tenant was a material breach that might justify an extreme measure such as shutting off the utilities.

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 shuts off a tenant’s utilities 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 Alaska, commercial tenants are indeed considered more sophisticated than residential tenants and are thus afforded fewer legal protections under the law. It is the responsibility of the commercial tenant to thoroughly review and negotiate the terms of a commercial lease agreement. The lease itself typically dictates the rights and obligations of both parties, including the circumstances under which a landlord may shut off utilities. While Alaska's contract law does not specifically outline the rights regarding utility shutoff for commercial leases, it does recognize an implied covenant of good faith and fair dealing in all contracts. This means that a commercial landlord's decision to shut off a tenant's utilities for minor infractions, such as being a few days late on rent, could potentially be seen as a breach of this implied duty. However, the specific terms of the lease agreement will generally be the primary guide for resolving such disputes. Commercial tenants should seek the advice of an attorney to understand their rights and obligations under a commercial lease agreement in Alaska.