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 New York, commercial tenants are indeed considered more sophisticated than residential tenants and are expected to negotiate the terms of their lease agreements. New York law does not provide the same level of statutory protections to commercial tenants as it does to residential tenants. This means that the rights and obligations of a commercial tenant are largely determined by the specific terms of the lease agreement. Regarding utility shutoffs, while the lease terms typically govern, a landlord's actions must also align with the implied covenant of good faith and fair dealing inherent in all New York contracts. This implies that a landlord may not shut off utilities for minor lease violations without potentially breaching this duty. However, the specific circumstances of each case would determine the legality of such an action. Commercial tenants are advised to seek the counsel of an attorney to understand their lease terms and to ensure their rights are protected.