Civil Remedies and the Commercial Lease
December 21, 2016
Christopher J. Charles, Esq.
Founder, Provident Law
Just like the ancient feudal lords, commercial landlords today have considerable rights and remedies if a tenant defaults. Two chief examples include the non-judicial lockout and pre-judgment provisional remedies. Fortunately, provisional remedies are rarely needed because the mere threat of enforcement generally accomplishes the landlord’s goals.
Unlike residential lease scenarios, in many cases, commercial landlords can typically evict the tenant without going to court. Indeed, in most cases a commercial landlord can perform a non-judicial lockout and effectively evict its tenant without a court order as long as the “lockout” does not breach the peace. This typically requires written notice to the tenant and extreme caution: although a lockout is generally quick and relatively painless, locking out a tenant from its business creates potential pitfalls and may expose the landlord to liability for wrongful attachment or trespass. Also, the landlord should first confirm with its attorney whether the commercial lease provides the landlord with the express right to perform the non-judicial lockout in the event of default.
In addition, a commercial lockout is the death knell to any business. Thus, this remedy should be reserved for those cases where the landlord is confident that there is no hope of salvaging the landlord/tenant relationship.
The American judicial system is the best in the world – but it isn’t perfect. One of its flaws is the delay that some claimants face when seeking a judgment. Claimants generally must wait six to twelve months before obtaining a judgment in a run-of-the-mill breach of contract action. But in many cases, commercial landlords have the unique ability to attach a tenant’s assets immediately in the event of a breach of the lease. For instance, the provisional remedies statutes authorize the creditor to seize the debtor’s assets “for the purpose of securing satisfaction of the judgment ultimately to be entered.” Rule 64, ARIZONA RULES OF CIVIL PROCEDURE; see also A.R.S. §§ 12-1521 and 12-2402(A). Thus, if the Court grants the provisional remedy, then the creditor can immediately move to garnish and attach all non-exempt assets to satisfy the money owed, including anticipated attorneys’ fees and costs. (Non-exempt assets include real property, cars, boats, ATVs, bank accounts, stocks, bonds, precious metals, jewelry, etc.)
Mr. Charles regularly represents landlords and tenants concerning leasing matters. If you or someone you know has questions regarding a lease, please call or email today to speak with Mr. Charles.