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 Virginia, a commercial lease agreement is a binding contract between a landlord and a tenant for the rental of nonresidential property, such as office spaces, warehouses, or retail locations. The terms of the lease agreement will dictate the rights and obligations of each party, including the payment of rent and the consequences of late payments. Virginia law allows landlords to charge late fees if this is specified in the lease agreement. However, the fees must be reasonable and not punitive in nature. The lease may also outline procedures for lockouts and lease termination in the event of non-payment. It's important to note that while Virginia law permits certain actions by landlords, such as charging late fees and lockouts, these actions must be in accordance with the lease terms and the implied duty of good faith and fair dealing inherent in all contracts. This duty requires both parties to act in a fair manner and not to undermine the other party's rights to the benefits of the contract. Therefore, a landlord's response to late payment should be proportionate and consistent with the lease provisions. Tenants facing such issues may benefit from consulting with an attorney to review their lease terms and the applicability of Virginia's contract law to their situation.