If they're locked out of their house, they should call me and I will let them in. (C).
They're, their, and there are all homophones or words that are pronounced the same. However they all have different meanings.
- They're is the contracted form of "they are."
- Their indicates possession.
- There indicates location.
Therefore, we can replace they're with they are.
- If they're locked out of... is the same as If they are locked out of...
They are in possession of the house, so it is their house.