Self Help Evictions: How to Make a Bad Situation Worse – January 2018
Terry Jessop & Bitner Newsletter
Issue 48, January 2018
You know the drill. A commercial landlord leases property, such as a business storefront, a warehouse, or office space, to a tenant. For whatever reason, the tenant falls behind on the rent and defaults under the terms of the lease. The landlord reviews the lease to evaluate her options, which range from a negotiated workout, to a suit for damages, to eviction. The last two options usually involve hiring an attorney, which most people try to avoid. But then the landlord spots an intriguing provision which says that upon default, the landlord has the right to re-enter and take possession of the leased premises. The provision permits self-help eviction, where the landlord takes back the property and kicks out the tenant without the time and expense of hiring an attorney and going to court. While this seems like a tempting option, it is not one we recommend.
Why Do We Even Have that Provision?
Self-help eviction provisions are a holdover from a time when commercial tenants were not covered by state eviction laws. Leases are contracts. In general, two parties are free to negotiate and enter into a contract for just about any purpose, so long as it is legal and not contrary to public policy. If the parties have freely negotiated, the terms of the contract will be enforceable, even if they favor one party over the other. Parties to commercial contracts are typically granted more leeway than parties to consumer contracts because commercial parties are presumed to be more sophisticated and on a more level playing field than consumers.
With this in mind, and because commercial landlords hoped to avoid eviction lawsuits, leases were negotiated to include self-help eviction provisions, or the right of re-entry, in the event of a default. For decades, Utah’s eviction statute prohibited self-help evictions against residential tenants. But the code was silent as to commercial tenants. Indeed, until 2009, the term “tenant” was defined in the eviction statute to expressly exclude commercial tenants. This meant that commercial landlords were not obligated to follow the judicial eviction process to evict defaulting tenants. In 2009, the legislature changed the definition of “tenant” to include commercial tenants. Hence, self-help evictions are no longer available to anyone in Utah.
Don’t Treble Yourself
Nevertheless, some landlords, both commercial and residential, continue to use lease contracts which contain the self-help remedy, mostly as a deterrent. Any landlord who actually wants to do a self-help eviction should reconsider. Failure to follow the judicial eviction process exposes a landlord to a claim for treble damages from the tenant.
The prohibition against self-help evictions does not prevent a landlord from negotiating an out-of-court resolution that includes the tenant turning over possession of the property. Whenever parties can solve their own disputes without resorting to the legal process, they are likely to be better for it. But when that fails, the best and safest option is to strictly follow the judicial eviction process set forth in the Utah Code.
If you find yourself in this situation, or any situation requiring legal advice, please call us. We can help.
© Terry Jessop & Bitner January 2018