If a business tenant fails to pay their rent, under Texas law a commercial landlord IS allowed to lockout a tenant from their own business. The Texas Property Code allows a landlord to change the “door locks of a tenant who is delinquent in paying at least part of the rent.”
Property law favors the landlord inasmuch as there is no grace period during which a tenant retains the right to access their business property while they try to come up with the overdue rent. The business tenant is at the mercy of the landlord in this instance. The landlord can do a lockout when the business renter is just one day late. But should they?
You might want to talk to a landlord-tenant lawyer first.
Legal Options for Commercial Landlords Owed Back Rent
A lockout is a drastic step for a commercial landlord to take for several reasons:
- It can cause significant harm to the business, making it even harder for the business owner to pay the rent owed.
- It could tip a troubled business owner into bankruptcy, making the landlord just one of ma ny creditors who may find their bills unpaid in full.
- It leaves the landlord on the hook for dealing with personal and business property left behind. Should the commercial tenant contest the lockout in court, how the landlord disposed of their property could become an issue.
- And of course, it leaves you with a vacant property on your hands that must be cleaned and repaired and re-rented.
A commercial landlord has other options for pressuring a tenant to pay the rent they owe, including:
- Charging late fees for every day rent is overdue,
- Bringing a lawsuit for rent owed, and if all else fails,
- Giving the tenant an eviction notice.
How to Lock Out a Commercial Tenant
There are a few legal processes that must be followed when locking out a commercial tenant. When the locks are changed, the landlord must put a written notice on the tenant’s front door telling them from whom and how a new key can be obtained. The new key must be made available, upon payment of back rent, during the tenant’s hours of business.
Landlord Risks in Wrongful Lockout Cases
There are times when an unresolved landlord-tenant dispute over a problem with the property a) causes the tenant to withhold rent thinking that is a way to pressure the landlord to make repairs (it’s not), or b) costs the tenant so much money they can’t afford to make their rent payment.
The tenant may have a valid legal claim against the landlord and that can muddy the waters.
If the landlord has wrongly locked out the commercial tenant in violation of their lease agreement or Texas Property Code, the tenant can seek legal redress to regain possession of the property or they can terminate their lease without penalty.
In the process, they can recover reasonable attorneys’ fees and court costs, as well as any damages they suffered as a result of the lockout, and one month’s rent (or $500, whichever is greater).
The landlord will still receive back rent.
Contact The Fell Law Firm
If you are a commercial landlord with a tenant who is behind in rent, it’s important to understand your options and your rights. Talk with a Texas landlord-tenant attorney before you take action to lock out a commercial tenant. Call the Richardson or McKinney law offices of The Fell Law Firm at 972-450-1418 or complete our online contact form to schedule a consultation with an attorney.