Commercial Tenant “Locked Out” When Current on Rent
Question: My sister has owned a dress shop in a major Phoenix shopping center for twelve years. Last year she was $50,000 delinquent in her rent, primarily because of an increase in the annual common area maintenance (“CAM”) charges due to a large increase in real property taxes for the shopping center. The shopping center gave her five days’ notice to pay this $50,000, but she didn’t have the $50,000 to pay within five days. After the five days passed the landlord filed an eviction lawsuit. Later that week my sister paid to the shopping center the $50,000 in delinquent rent, plus all of the shopping center’s attorney’s fees and costs.
My sister continued to pay the monthly rent, and was current on all of her rent when three days ago she was “locked out.” (She has now learned that the shopping center wants a boutique retailer to take my sister’s leased space for three times my sister’s rent.) Although my sister’s lawyer said that there was nothing that could be done, my sister still does not understand how she can be “locked out” when she was current on her rent. Is that the law?
Answer: Yes. If a commercial tenant does not pay delinquent rent after notice from the landlord as required by the lease, the tenant’s right to possession is terminated. The landlord can then file an eviction lawsuit. Once filed, the landlord has the right to accept any rent payments while also maintaining the right to administer self-help with a commercial lock out.
Note: A residential tenant living in an apartment or a home has much greater protection than a commercial tenant. One, a residential tenant can stop any eviction proceedings by paying the rent and the landlord’s attorney’s fees and costs. Two, the landlord does not have any right to “lock out” a residential tenant, but must always file a lawsuit to evict a residential tenant.