Commercial Landlords Should Approach Self-Help Carefully

Knox Withers, AGG Real Estate and Litigation partner, authored an article for Law360 titled, “Commercial Landlords Should Approach Self-Help Carefully,” which was published on March 31, 2023.

In the article, Knox reminded landlords of the importance of taking lawful measures to recover possession of a leased premises when a commercial tenant falls behind on rental payments. Some states may allow landlords to exercise “self-help” as a remedy, usually written in a lease as “following an event of a default, Landlord may change or alter the locks and remove all of Tenant’s property from the Premises and store the same in a public warehouse or elsewhere at the cost of, and for the account of, Tenant, without becoming liable for any loss or damage which may be occasioned thereby.” However, other states prohibit this option or significantly restrict it.

Landlords frequently seek advice about the legality and propriety of changing the locks to the premises, putting the tenant’s property out on the street, terminating utility services and similar actions. Those are two separate inquiries, and the standard response is that, while doing so may be legal, it is rarely advisable. Only in very limited circumstances should a commercial landlord lock the tenant out of the premises, terminate utility services or engage in other forms of self-help. Frequently, the filing of a statutory dispossessory action — which, depending on the jurisdiction, may also be known as an unlawful detainer, forcible detainer, summary process, or similar proceeding — is the exclusive procedure by which a landlord may legally evict a tenant.

If a landlord elects to forgo this statutory procedure, it may be held liable for wrongful eviction and trespass, including the prospect of a judgment for compensatory, consequential, and punitive damages. Filing a dispossessory action, obtaining a writ of possession, and conducting a legal eviction under the supervision of a local law enforcement officer virtually eliminates the risks associated with self-help.

But what about the limited situations in which self-help is acceptable, if not advisable? Those scenarios tend to involve a tenant who has clearly (1) abandoned the premises; and (2) removed all personal property of value. In other words, such situations are more akin to securing an abandoned premises, rather than evicting a defaulting tenant.

“Short of these narrow exceptions, pursuing a formal eviction action to obtain a writ of possession is advisable, even if doing so is more time-consuming and expensive than resorting to self-help,” said Knox. “Following the eviction procedures prescribed by the legislature will insulate a commercial landlord from unnecessary and avoidable peril.”

To read the full article, please click here (subscription required).