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 Kansas, commercial tenants are indeed considered more sophisticated than residential tenants and are thus afforded fewer legal protections. Kansas law assumes that commercial tenants are better equipped to negotiate the terms of their leases and understand the implications of those terms. Consequently, it is crucial for commercial tenants to thoroughly review and negotiate their lease agreements to secure necessary protections for their business operations and financial stability. Regarding utility shutoffs, such actions by a commercial landlord in Kansas would typically be governed by the specific terms of the lease agreement and general contract law principles. While there is no explicit statute in Kansas that addresses a landlord's ability to shut off utilities for commercial tenants, the implied covenant of good faith and fair dealing applies to all contracts, including commercial leases. This means that a landlord who shuts off utilities for a minor lease violation, such as being a few days late on rent, could potentially be found in breach of this implied duty. It is advisable for commercial tenants to seek the advice of an attorney to understand their rights and obligations under a commercial lease agreement.