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 South Carolina, commercial tenants are indeed considered more sophisticated than residential tenants and are thus afforded fewer legal protections under the law. Commercial tenants are expected to be diligent in reading, understanding, and negotiating the terms of their lease agreements. The protections a commercial tenant enjoys are largely dictated by the specific terms of the lease they sign. South Carolina contract law does recognize an implied duty of good faith and fair dealing in contractual relationships, which applies to commercial leases as well. Therefore, a commercial landlord's decision to shut off utilities for a tenant's minor breach, such as being a few days late on rent, could potentially be seen as a violation of this duty. However, the actual outcome would depend on the lease's provisions and the circumstances surrounding the breach. Commercial tenants should ensure they fully comprehend their lease terms and seek legal advice when necessary to protect their interests.