What you should know about locking out a commercial tenant

On Behalf of | Jul 18, 2019 | Blog

As a landlord, few things are worse than a tenant that doesn’t pay rent. It can take an immediate bite out of your income, while also requiring you to pepper them with reminders about what they owe.

In some circumstances, a landlord may even be tempted to utilize an option provided by the law: a lockout.

When a landlord can lock out a commercial tenant

A commercial property lockout is pretty much just what it sounds like. A landlord is able to reenter and take possession of the shop. In order for this to be a legal option one of two things generally must happen, as laid out by Arizona law. Either:

  • The tenant does not pay rent and is five or more days overdue
  • The tenant violates “any provision” of the lease

In addition, in the case of a lockout, the landlord is able to seize certain items of the tenant’s personal property that are located on the premises, “as is necessary to secure payment of the rent.” Sixty days after that point, if the tenant still has not paid the rent, the landlord may be able to sell that seized property in order to recoup the owed amount.

There are legal risks to consider

While locking out a tenant may seem like a good option, you should consider a few potential issues before taking any action.

First of all, check the lease. There may be language in the contract that alters what you as a landlord are allowed to do in these situations. For example, you may have to give written notice ahead of time before locking out the tenant. The lease might also specifically forbid lockouts altogether.

In addition, a landlord could wind up inadvertently putting themselves at legal risk. If the landlord is in some way in breach of the contract, or if they do not adhere exactly to what the law allows, that may open the door for legal consequences.

Rather than jumping straight to a lockout over late rent, you may want to first consider other options. That’s something an attorney may be able to help sort out. While a landlord deserves whatever they’re owed, there may be more effective means of getting it than a lockout.