In this series of articles, we will be providing information to commercial landlords about various aspects of commercial rental property. These articles will include best practices for lease agreements, as well as how to properly evict a commercial tenant.

In this article, we will discuss some of the differences between residential evictions and commercial evictions in Oklahoma.

What is the difference between Residential Property and Commercial Property

In Oklahoma, residential property is defined as any real estate that is used as a dwelling, meaning a place where someone would live. Leases and rental agreements involving dwellings are governed by the Oklahoma Residential Landlord-Tenant Act. 41 Okla. Stat. § 101, et. Seq.

Therefore, residential property includes single family homes, duplexes, and even large multi-family apartment complexes. In fact, any lease agreement where the tenant is using the property as a dwelling would governed by the Oklahoma Residential Landlord & Tenant Act. This would include apartment units connected to commercial units.

Commercial property, on the other hand, is any property used for any purpose other than as a dwelling. This would include agricultural land, industrial urban property, shopping centers, and office buildings. Leases and rental agreements involving these types of properties are governed by different statutes than residential properties.

What are the differences between Residential leases and Commercial leases in Oklahoma?

In Oklahoma, all residential lease arrangements are governed by the Oklahoma Residential Landlord Tenant Act, as explained above. Because of this, there are not huge variances in what could be included in residential lease, like there are in commercial leases.

Commercial leases cover so many different types of tenancies, from grocery stores to strip clubs, to industrial sites to marijuana grow facilities, to office complexes and museums, that there must be a written lease to govern these unique situations.

Also, a commercial landlord has much more liberty to include penalties, fees, and certain performance obligations that a residential landlord cannot do.

Oklahoma law is set up to protect the residential tenant, and therefore limits the creativity of residential leases. But commercial leases do not have such limitations and the parties are free to create whatever unique terms that can agree on.

The difference between a Residential Eviction and a Commercial Eviction in Oklahoma

There are several differences between evicting a commercial tenant and a residential tenant in Oklahoma.

For one, the notice requirement is different. To cancel a residential lease for non-payment of rent, the landlord need only provide five days notice to the tenant. However, in commercial leases, the landlord must provide ten days notice if the client is more than 3 months behind, or five days notice if the tenant is less than 3 months behind.

Another difference involves repair obligations. Under the Residential Landlord and Tenant Act, a tenant may withhold rent if the landlord fails to make repairs. However, in commercial leases, the tenant is generally responsible for repairs, and therefore, this would not be a valid defense to the eviction.

Then there are the differences in litigation strategy. In a residential lease, you likely won’t be pursuing a judgment for more than $10,000, so you obtain a judgment for possession (i.e. the eviction) as well as a judgment for the amount of past-due rent in the same hearing. However, the special courts that hear forcible entry and detainer actions are limited to small claims jurisdiction. So if you have a tenant that owes more than $10,000 in rent, you will have to file a separate lawsuit in district court to obtain that money judgment.

Why Commercial Landlords must understand their legal rights in Oklahoma

Do you own commercial real estate in Oklahoma? As a commercial landlord, you need to know your rights when it comes to landlord tenant relations.

Commercial Landlords must exercise proper management over their tenants in order to maximize Net Operating Income (NOI), while also preserving (or improving) the condition of the property.

Your relationship with your tenants directly affects the value of your real property asset. Vacancy, occupancy rates, collection of rents, wear and tear, maintenance and repair expenses all affect your cash flow. Your cash flow is what determines your CAP rate and the value of your commercial property. All of these things are a result of your management of landlord-tenant relations.

Contact OKC’s Commercial Landlord Lawyer, Travis Charles Smith

Travis Charles Smith has been working for commercial property landlords and real estate investors since 2009. Travis has been involved in major disputes and litigation involving everything from asset receivership litigation to construction liens to Chapter 11 bankruptcy adversary proceedings.

Travis represents real estate investors in commercial property evictions, and in litigation over rent collection, lease disputes, and asset seizures.

Travis can help you do any of the following:

  • Evict a commercial tenant,
  • Sue to collect rents due,
  • Enforce Landlord Liens against Tenant property, equipment or inventory
  • Defend you against Mechanic’s Liens or contractor lawsuits

Travis is himself an experienced real estate investor, both in syndicated limited partnerships as well as in privately held portfolio.

Hire Travis Charles Smith to protect your assets and your cash flow. Call the office at (405) 724-8112 or send us an email to schedule a consultation.