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 Dakota, commercial tenants are indeed considered more sophisticated than residential tenants and are expected to negotiate the terms of their lease agreements. The protections afforded to commercial tenants are not as extensive as those for residential tenants, which means that commercial tenants must be diligent in understanding and negotiating their lease agreements. The terms of the lease typically dictate the landlord's ability to shut off utilities, and while South Dakota contract law does recognize an implied duty of good faith and fair dealing in contractual relationships, this does not necessarily prevent a landlord from taking actions such as shutting off utilities if such actions are permitted under the lease agreement and are a response to a material breach by the tenant. 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 to carefully review their lease terms and seek legal advice if necessary to ensure their rights and interests are adequately protected.