A business that leases real estate and improvements (buildings, etc.) in the form of space for offices, a warehouse, a restaurant, a nail or hair salon, a clothing store, a coffee shop, or other commercial (nonresidential) space will usually be required to sign a written contract known as a commercial lease agreement.

If the tenant (the business occupying the space) who signs a commercial lease agreement fails to pay the rent on time, the landlord may have the right to charge late fees, terminate the lease, and lock the commercial tenant out of the space by changing the locks.

A commercial landlord’s ability to charge late fees generally depends on the specific language in the written lease agreement and the state's contract law.

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 charges late fees because the tenant is an hour late paying the rent may be in breach of the landlord’s implied duty of good faith and fair dealing—unless, for example, the lease agreement specifies an hour (12:00 p.m.) of the day by which rent is due and states that time is of the essence.

In Tennessee, a business leasing commercial space such as offices, warehouses, or retail locations will typically enter into a commercial lease agreement. This written contract outlines the terms and conditions of the lease, including rent payments, the use of the property, and the rights and responsibilities of both the landlord and the tenant. If a tenant fails to pay rent on time, the landlord may impose late fees, terminate the lease, or even lock the tenant out, depending on the provisions of the lease agreement. Tennessee law allows for late fees as long as they are reasonable and specified in the lease. The state also recognizes the implied duty of good faith and fair dealing in contracts, which means that both parties are expected to act honestly and fairly in the performance of the lease. A landlord's actions, such as charging excessive late fees or locking out a tenant for a minor delay in rent payment, could potentially breach this duty if not clearly justified by the lease terms. It is important for both landlords and tenants to understand their legal rights and obligations under the lease and Tennessee law. An attorney can provide specific guidance on these matters.