In Texas, commercial leases are governed by strict contractual obligations. As a commercial tenant, you may feel justified in withholding rent due to various grievances, such as unresolved maintenance issues or alleged breaches of the lease by the landlord. However, failing to pay rent—even when you believe you have a legitimate reason—can have severe consequences under Texas law.
If you believe you feel bad now while you are still in business, think about how life will be if your client’s property is trapped within your facility because you found yourself locked out of your business.
Wait…what….
Here’s why it is crucial to continue paying rent, even in the face of disputes.
1. Texas Law Strongly Favors Landlords
Texas law is landlord-friendly, especially in the commercial leasing sector. Most commercial leases include explicit terms that outline the tenant’s obligations, with rent payment typically considered a primary duty. Withholding rent, even temporarily, can result in legal actions such as being locked out and prevented from retrieving critical business records, rent acceleration for the full term of the lease, and eventual eviction. You will be liable in most cases for the attorneys’ fees of the landlord. Courts in Texas are generally unsympathetic to commercial tenants who stop paying rent, regardless of the reasons, unless explicitly permitted by the lease terms. The reason being is that payment of rent is the condition precedent to receiving any relief under law or contract.
2. Protecting Your Business from Eviction
Nonpayment of rent is one of the most common grounds for eviction in Texas. If a landlord initiates eviction proceedings due to unpaid rent, your business operations could be disrupted or halted entirely. This could lead to not only a loss of revenue but also damage to your reputation and customer relationships. Paying rent while disputes are resolved helps ensure continuity in your business operations.
3. Preserving Legal Standing
When disputes arise, courts often require tenants to demonstrate that they acted in good faith. Paying rent on time, even while contesting a landlord’s actions, shows the court that you are fulfilling your contractual obligations and are committed to resolving the issue amicably. This can bolster your credibility in any legal proceedings.
4. Avoiding Additional Costs and Penalties
Most commercial leases in Texas include provisions for late fees, interest on overdue payments, and legal costs incurred by the landlord in pursuing unpaid rent. These costs can quickly escalate, leaving you in a worse financial position than if you had paid the rent while addressing your concerns separately.
5. Limited Legal Grounds for Rent Withholding
Unlike residential leases, where tenants might have statutory rights to withhold rent for certain reasons, such as uninhabitable conditions, commercial tenants in Texas rarely have such protections. Unless your lease specifically allows for rent withholding in certain circumstances, such as a landlord’s failure to meet maintenance obligations, withholding rent could constitute a breach of contract.
6. Alternative Dispute Resolution Mechanisms
If you have valid concerns about your landlord’s actions, there are alternative ways to address these issues without jeopardizing your lease. Mediation, arbitration, or even litigation can provide avenues for resolving disputes while maintaining compliance with your lease. Paying rent ensures that these processes can proceed without the added complication of defending against an eviction claim.
7. Protecting Your Credit and Future Leasing Opportunities
Nonpayment of rent can lead to judgments against you, which may appear on your credit report. This can harm your business’s ability to secure future leases or financing. Maintaining a clean record of rent payment demonstrates reliability and professionalism, which can be critical for future endeavors.
Call Sprigg-Novak Law
While it may feel unjust to continue paying rent in situations where the landlord appears to be at fault, Texas law and commercial lease agreements provide limited remedies for tenants who choose to withhold payment. By continuing to pay rent, you protect your business from eviction, additional financial penalties, and damage to your legal standing. If you’re facing a dispute with your landlord, consult the qualified attorneys at Sprigg-Novak Law to explore your options while ensuring you remain compliant with your lease. Taking a proactive and lawful approach can help safeguard your business’s interests in the long run. So please keep this mind: Pay rent first THEN obtain your legal relief.
