H. Landlord's Rights

• Library: Practical Guide to Commercial Real Estate in South Carolina (SCBar) (2012 Ed.)

H. Landlord's Rights

1. Distraint

When a tenant is in arrears, the landlord may use distraint, also known as distress, in order to collect rents due.¹⁰³ Distraint is the process by which a landlord seizes a tenant's personal property to cover arrearage.¹⁰⁴ The power to distrain property is not without restrictions and must be (1) for rent only; (2) when the landlord-tenant relationship exists; (3) when rent is certain; (4) when rent is in arrears and (5) when the property belongs to the tent in the tenant's own right.¹⁰⁵

To bring about an action for distraint, the landlord must file an affidavit with the appropriate magistrate.¹⁰⁶ After a hearing, a law enforcement official will go to the tenant with a warrant and attempt to get either payment of the arrearage or possession of the personal property.¹⁰⁷ If the tenant continues to withhold payment, the property is sold at a public auction, and the money is given to the landlord.¹⁰⁸ Any proceeds from the sale in excess of the arrearage are returned to the tenant.¹⁰⁹

Due to the harshness of the remedy, the distraint process and statutes are subject to strict limitations.¹¹⁰ In fact, a landlord can be liable for damages resulting from any excessive distraint. Additionally, the officer attempting to enforce the warrant does not have the authority to break and enter the leased premises.¹¹¹

2. Action for Rent

With a tenant in default, the landlord can bring any of three actions for rent due.¹¹² In the first action, the landlord immediately brings suit for all the damages, present and prospective, resulting from the breach.¹¹³ The measure of these damages is the rental value for the entire term less any rent already received, with the additional of special damages.¹¹⁴ In the second action, the landlord terminates the lease and brings suit for breach.¹¹⁵ In this scenario, the landlord is only entitled to any rents due up until the termination and the tenant is absolved from future obligations.¹¹⁶ In the third and final action, the landlord allows the lease to expire and sues for the arrearage.¹¹⁷ In this action, the landlord is due the entire rent due under the lease minus any rents paid.¹¹⁸

Under South Carolina case law, commercial landlords are required to mitigate damages.¹¹⁹ Thus, using reasonable diligence, the landlord must look for a new tenant to minimize damages.¹²⁰ A failure to mitigate damages (or attempt to mitigate) can result in no damage award.¹²¹

3. Ejectment

A tenant can be ejected for failing to pay rent, at the expiration of the term of the lease or for violating the terms and conditions of the lease.¹²² Nevertheless, the lease can also indicate additional terms of default that will result in the landlord regaining possession of the land.¹²³ If the lease defines default, the lease, not the statute, should be used to determine ejectment.¹²⁴ However, a lease does not have to provide for the statutory ejectments because they automatically apply.¹²⁵

The landlord must apply with a court for a written rule requiring the tenant to vacate the premises.¹²⁶ If the tenant does not respond within ten days to show cause why the ejectment is improper, then the court will issue a warrant for ejectment.¹²⁷ A law enforcement officer will enforce the warrant.¹²⁸

In Kiriakides v. United Artists Communications, Inc., the landlord brought an action for ejectment based on a commercial tenant's innocent failure to pay full rental value after the rent increased.¹²⁹ The court held that "a forfeiture for a trivial or immaterial breach of a commercial lease should not be enforced."¹³⁰ Thus, in response to its concern that the causes of action for breach in a commercial lease are almost limitless, the court adopted the Restatement (Second) of Contracts five-part test to determine triviality.¹³¹

4. Landlord's Lien

A landlord possesses no lien on the personal property of the tenant.¹³² The only way a landlord can obtain a lien on the property of a tenant is through levying a distraint warrant.¹³³

A landlord's lien created by distraint does not take priority over a prior security...