The tenant (the business occupying the space) who signs a commercial lease agreement is generally expected to be a more savvy, sophisticated, and informed tenant (also known as a lessee) than a tenant in a residential lease, and the law usually does not provide a commercial tenant with the same protections as residential tenant receives.

Because the law does not provide a commercial tenant with many protections, it is up to the commercial tenant to read, understand, and negotiate protections in a proposed lease agreement before signing it, as most every paragraph in a commercial lease agreement can have a significant impact on a business’s operations and financial stability.

Laws vary from state to state, but a commercial landlord’s ability to shut off a tenant’s utilities is usually determined by the terms of the lease agreement and the state’s contract law—to determine, for example, if any breach of the lease agreement by the tenant was a material breach that might justify an extreme measure such as shutting off the utilities.

Contract law in most states recognizes an implied duty of good faith and fair dealing between parties to a contract, and a commercial landlord who shuts off a tenant’s utilities because the tenant is a few days late paying the rent may be in breach of the landlord’s implied duty of good faith and fair dealing.

In Kentucky, commercial tenants are indeed considered more sophisticated than residential tenants and are thus afforded fewer legal protections under the law. The expectation is that a commercial tenant will thoroughly review and negotiate the terms of a commercial lease agreement to secure their own protections, as the lease can significantly affect their business operations and financial health. Unlike residential leases, which are heavily regulated to protect individual tenants, commercial leases are largely governed by the terms agreed upon by the parties involved. Regarding utility shutoffs, Kentucky's contract law would typically defer to the specific provisions of the lease agreement to determine the landlord's rights in such situations. However, even in commercial contexts, there is an implied duty of good faith and fair dealing that both parties to a contract must adhere to. A commercial landlord who shuts off utilities for a minor lease violation, such as being a few days late on rent, may be violating this duty. It is crucial for commercial tenants to understand their lease terms and seek the advice of an attorney if they are unsure about their rights and obligations.