Tennessee Business Litigation Lawyers Blog
In situations in which a tenant under a commercial lease is in default, landlords tempted to lock the tenant out or to repossess the property should proceed with due respect for a Tennessee statute that has been around since 1821. That statute is known as the “forcible entry and detainer” statute.
The forcible entry and detainer statute creates a right on the part of the landlord to bring a court action to obtain a writ of possession for real property (held under either a commercial lease or residential lease) where the tenant continues to occupy the property after the lease has been terminated. The statute is a two-edged sword, so to speak, because its existence also makes it unlawful for a landlord to repossess or to lock out a tenant unless the landlord first obtains a writ of possession via a forcible entry and detainer action.
A Tennessee commercial lease case involving a commercial space at the Memphis, Tennessee Airport, discusses the rationale behind the Tennessee forcible entry and detainer statute, and how the landlord in that case ran afoul of the statute. In that case, the landlord had a lease which provided: “In the event of the cancellation or termination of this Lease by the Lessor, the Lessor may immediately or any time thereafter re-enter the demised premises… and repossess and have the same….” The lease in that case did not require the landlord to obtain court approval of any type before re-taking possession of the property.
It was undisputed, in that case, that the tenant was in default of the terms of the lease for not paying rent. The landlord sent a letter to the tenant terminating the lease, and then went onto the premises and placed a padlock on the gate to the premises. The landlord had not filed a forcible entry and detainer action and obtained a writ of possession or otherwise obtained court permission of any type before locking the tenant out of the property. Notably, for about three years prior to the landlord sending the termination letter and locking the tenant out, the leased premises, a restaurant, had been vacant and closed.
The tenant filed suit for, among other causes of action, the landlord’s violation of the Tennessee forcible entry and detainer statute for re-taking the premises without first resorting to a court. The landlord argued that it was not required to seek a writ of possession from a court before locking the tenant out because the parties had agreed in the written lease that the landlord did not have to do so.
The court found that, although the tenant had vacated the building, it was legally still in possession of the building by virtue of its rights under the lease. The court then found that, despite the provisions of the lease involved in that case, the landlord was, nevertheless, required to obtain a writ of possession before repossessing the property.
The court reasoned that requiring landlords to bring forcible entry and detainer actions to repossess property served the purpose of preventing breaches of the peace that occur as the result of the “inherent friction” created when landlords use “self-help” to repossess property. The court did note that landlords might be excused from the requirement of obtaining writs of possession in cases where tenants had abandoned the property or voluntarily surrendered it. (Note that, in that case, failing to pay rent and not occupying the property for three years did not amount to an abandonment).
Ultimately, the tenant’s victory in the case was a hollow one as the court determined that, even though the landlord had violated the law, the tenant had suffered no damages as a result of the violation. Where a landlord’s violation of the forcible entry and detainer statute could result in significant monetary damages being awarded against it are not too hard to imagine. For example, if a landlord’s failure to use the court system deprived the tenant of notice of the landlord’s intentions and the opportunity to remove or to protect assets or equipment in the leased premises, that landlord might not get off the hook so financially painlessly.