Can A Commercial Landlord Engage In Self-Help Against A Tenant In Default?

• Published date: 20 September 2022
• Subject Matter: Real Estate and Construction, Landlord & Tenant - Leases
• Law Firm: Holland & Knight
• Author: Mr Eric Ray

Maybe, But It Depends Upon the State in Which the Property Is Located

The COVID-19 pandemic caused unprecedented financial damage to the commercial real estate sector. Commercial landlords were forced to make difficult decisions, including whether to accept rent abatements, payment deferrals, delayed tenant buildouts, lease renegotiations or other means of achieving a commercially reasonable outcome. Many landlords, however, either had no choice or opted to pursue formal eviction proceedings - against those tenants including small businesses, restaurants, bars, etc., that suffered financially during the pandemic and defaulted on their leases - to retake possession of their premises or recover what they could in unpaid rent and other leasehold financial obligations such as taxes and water. In less frequent circumstances, some landlords took matters into their own hands by avoiding court intervention and exercising self-help tactics such as placing locks or chains on doors, changing locks or deactivating keycards to evict their tenants in default.

For landlords operating in multiple states, hiring a law firm that knows the nuances of when self-help is permitted is essential for efficient lease negotiations and enforcement. And just because a lease purports to allow self-help evictions does not mean a court will enforce that provision. This blog highlights, by example, the various ways in which states address the use of self-help by a commercial landlord upon a tenant's default.

Florida

Under Florida law, commercial landlords are prohibited from taking matters into their own hands. The court in Palm Beach Fla. Hotel v. Nantucket Enterprises, Inc., 211 So. 3d 42 (Fla. 4th DCA 2016), citing Florida Statutes, Section 83.20, recognized that the "only" methods a landlord can utilize to retake possession of its premises from a tenant in default are by: 1) court order granting possession to the landlord; 2) when the tenant surrenders the premises to the landlord; or 3) when the tenant abandons the leasehold. Significantly, the Court in Palm Beach Fla. Hotel affirmed the trial court's award of $8.8 million in favor of the tenant after determining that the landlord - who did not comply with the above-referenced statutorily enumerated methods - had wrongfully evicted the tenant notwithstanding that the operative lease authorized the landlord to exercise self-help in the event of the tenant's default.

Texas

In Texas, a commercial landlord is prohibited from, among other...