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 on time, the landlord may have the right to charge late fees, terminate the lease, and lock the commercial tenant out of the space by changing the locks.

A commercial landlord’s ability to charge late fees generally depends on the specific language in the written lease agreement and the state's contract law.

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 charges late fees because the tenant is an hour late paying the rent may be in breach of the landlord’s implied duty of good faith and fair dealing—unless, for example, the lease agreement specifies an hour (12:00 p.m.) of the day by which rent is due and states that time is of the essence.

In Hawaii, a commercial lease agreement is a binding contract between a landlord and a business tenant for the rental of nonresidential property, such as office spaces, warehouses, or retail locations. The terms of the lease, including the payment of rent and the consequences of late payments, are governed by the specific language of the lease agreement itself. If a tenant fails to pay rent on time, the landlord may impose late fees, terminate the lease, or lock out the tenant, provided these remedies are outlined in the lease agreement and comply with Hawaii's contract law. Hawaii's contract law also includes an implied duty of good faith and fair dealing, which requires both parties to act honestly and fairly in the execution of the contract. A landlord's right to charge late fees or take other punitive actions must align with this duty and the explicit terms of the lease. For instance, a landlord may be justified in charging late fees or taking prompt action if the lease specifies a precise time by which rent is due and emphasizes that timely payment is critical ('time is of the essence'). It is advisable for both landlords and tenants to have their lease agreements reviewed by an attorney to ensure that the terms are clear, enforceable, and in compliance with Hawaii's legal requirements.