How a temporary restraining order may help a business tenant in a rent dispute
Question: Our property management company leases a small office building. The lease is for five years, with an option for another five years at the same monthly rent. After we exercised our five-year option, our new landlord was very upset at the same monthly rent and demanded additional monthly rent. We refused. Our lease has a five-business-day “late rent” default provision. In other words, only if we were late on rent after five business days did the landlord have the right to lock us out. This month, our rent was due on Wednesday, the first day of the month. We were planning on hand-delivering the monthly rent to the landlord the following Monday, which would have been on the fourth business day. When we came to our offices the following Monday, however, our offices were padlocked with an armed security guard standing in front of the main door. We had no access to our computers and mail. In addition, many of our tenants hand-deliver their rent to us on the first few days of the month. Our entire business could have been destroyed in a matter of days. Thus, we contacted the new landlord of our building. Later that same day, we signed an amendment to the lease for increased rent and a release of the landlord from any claim for a “wrongful lockout.” Did we have any other option?
Answer: Your only other option would have been to file a lawsuit and have a judge order your landlord to give you immediate access to your offices. This initial order of the judge would be a temporary restraining order (“TRO”) — after a hearing, which could take up to a week to schedule.
Comment: We represented a national insurance company with a Scottsdale office that was wrongfully locked out over the Christmas holidays after three business days, instead of the five business days required by the lease. Due to the Christmas holidays, we could not get a TRO hearing scheduled until two days after New Year’s Day. By that time, the national insurance company had closed their Scottsdale office and transferred their employees to their other offices in the Valley.