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 Louisiana (LA), commercial tenants are indeed considered more sophisticated than residential tenants and are thus afforded fewer legal protections. The expectation is that a commercial tenant will thoroughly review and negotiate the terms of a commercial lease agreement to secure their own interests. Unlike residential leases, which are heavily regulated to protect individual tenants, commercial leases are largely governed by the lease agreement itself and general contract law. In Louisiana, the rights and obligations of both the landlord and tenant, including the landlord's ability to shut off utilities, are primarily dictated by the specific terms of the lease agreement. While there is an implied duty of good faith and fair dealing in contractual relationships, this does not necessarily prevent a landlord from taking actions like shutting off utilities if such actions are permitted under the lease and the tenant has materially breached the contract. However, a landlord acting in a manner that is considered arbitrary or unreasonable, such as shutting off utilities for a minor or brief late payment, may be seen as breaching this implied duty. It is crucial for commercial tenants in Louisiana to negotiate lease terms that provide adequate protections and to understand their legal rights under the state's contract law.