Tempted to Change the Locks? Why a Commercial Landlord Should Avoid Self-Help

Tempted to Change the Locks? Why a Commercial Landlord Should Avoid Self-Help

Commercial real estate law


Article

Your tenant stops paying or refuses to comply with a term of the lease it executed and you want nothing more than to get them out of the property – quickly. You do not want to go through the eviction process in the court. You believe it will take too long, be too expensive, and is just not worth the trouble. You have heard about other landlords changing locks and exercising their right of self-help. Should you follow in their footsteps? Before you decide to change the locks, here are some reasons why you might want to reconsider.

First, what is self-help? Self-help is when a landlord, without bringing a lawsuit, takes action to repossess the property leased by the tenant. A common example is when a landlord changes the locks when the property is unoccupied. A landlord has the right to self-help if ALL of the following apply: (1) it is a commercial lease (i.e. lease for business purposes); (2) the tenant remains in the property after the term of the lease expires (what is known as a holdover tenant) or the tenant materially violates a term of the lease; (3) the landlord gives all required notices under the lease (such as a termination notice or right to cure notice); (4) the lease specifically allows the landlord to use self-help measures; and (5) the self-help is conducted without a breach of the peace. If any of these conditions is not met, then self-help is not an option.

Following those rules seems easy, right? Here are the risks.

If any one of the conditions above is not met (and sometimes even if they are), then you are likely to be the subject of a lawsuit by the tenant. There are several claims that typically arise out of a landlord attempting to repossess through self-help measures. A tenant could assert wrongful termination of the lease and wrongful eviction, conversion of property (withholding of property from the person entitled to possession), and trespass. The tenant can seek damages arising out of these claims, including actual damages (the amount of money lost as a result of the landlord’s actions) and lost profits arising out of the tenant’s inability to run its business. A tenant can also seek punitive damages (which are intended to punish and deter the landlord from doing the same thing again) and attorneys fees. There is no way to guess at the specific amount of punitive damages that may be awarded to the tenant.

Even if you are successful in fighting off these claims, you will have lost time and money. You will spend a significant amount of time defending the lawsuit and you will likely incur significant legal expenses in defending such an action if you choose to hire an attorney.

While it may take a bit longer than changing the locks and while it may have an upfront cost, following the statutory process for eviction can give the landlord peace of mind. Court backed and aided by the sheriff or other law enforcement officer, the eviction process is the safest option.