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Understanding the Rights of Commercial Landlords

Matthew R Harris Law P.C. Feb. 22, 2024

Modern Commercial BuildingAs a commercial landlord in Canada, understanding your rights is crucial for protecting not only yourself, but also the tenants who rent your property.

The more knowledge you have, the better prepared you'll be to navigate potential challenges in your landlord-tenant relationships

Let's explore these rights in depth. 

Right to Collect Rent

As a commercial landlord, one of your fundamental rights is clearly stated in your lease agreement: the ability to collect rent from your tenants.  

Having well-defined payment terms helps foster a mutually beneficial relationship between you and your tenants, as it provides a framework for both parties to understand their responsibilities and expectations regarding rent payment. By clearly outlining the frequency, due dates, and accepted payment methods, you can minimize confusion and avoid any potential disputes or delays in collecting rent. 

Furthermore, incorporating late payment penalties or incentives for early payment can incentivize your tenants to prioritize timely rent payments. This can serve as a motivation for tenants to fulfill their financial commitments promptly. 

Regularly reviewing and communicating the payment terms with your tenants is also important. This helps ensure that everyone is aware of the agreed-upon terms and any updates or changes that may occur.

Right to Enforce Lease Terms

Commercial landlords have the authority to enforce the terms and conditions of the lease agreement. This encompasses various aspects, such as ensuring tenants fulfill their maintenance responsibilities and abide by any applicable restrictions or regulations. 

Furthermore, you have the right to ensure that tenants use the property in accordance with its intended purpose. They can monitor and regulate the activities conducted on the premises, ensuring that they align with the agreed-upon terms. This helps maintain the integrity of the property and protects the interests of both the landlord and other tenants. 

You can impose certain restrictions or regulations to ensure the smooth operation of the property. These may include rules on noise levels, hours of operation, or specific permitted uses.  

By enforcing these restrictions, landlords create a safe, conducive environment for all tenants and maintain expectations within the property. 

Right to Inspect the Property

Landlords have the right to conduct inspections of the leased property to ensure that it is being properly maintained and used in accordance with the lease agreement.  

During an inspection, landlords may check various aspects of the property, such as the condition of the premises, functionality of appliances, and compliance with safety regulations. These inspections help ensure that the property remains in good condition and that any necessary repairs or maintenance can be addressed promptly. 

However, landlords should exercise this right mindfully and provide tenants with reasonable notice before carrying out any inspections. By doing this, you demonstrate that you respect their tenants' privacy and give them an opportunity to prepare for the visit, which promotes a positive landlord-tenant relationship based on trust and mutual respect. 

Right to Evict Non-Compliant Tenants

In the event that a tenant violates the terms or agreement of the lease, a commercial landlord has the right to initiate eviction proceedings.  

However, as a landlord, you’re required to adhere to the proper legal procedures and obtain a court order in order to proceed with the eviction, ensuring that the rights and protections of both parties involved are respected and maintained throughout the process. 

By following the appropriate legal channels, landlords can address breaches of lease agreements effectively and fairly. Landlords must understand and comply with these legal obligations to protect their own interests and maintain a professional and lawful approach to resolving disputes with tenants. 

Right to Seek Damages

If a tenant causes damage to the property that goes beyond normal wear and tear, a commercial landlord has the right to seek compensation for repairs or restoration.  

To pursue compensation for damages caused by a tenant, a landlord must first document the condition of the property both before and after the tenancy. This typically involves a detailed walk-through inspection, photographs, and any signed inspection reports created when the tenant first moved in.

Should the landlord discover damages, a cost estimate for repairs must be provided to the tenant, outlining the necessary actions to remedy the damage and the associated costs. If the tenant fails to respond or refuses to pay for the damages, the landlord may then utilize the security deposit, if applicable, to cover the costs or proceed with legal action to recover the expenses.  

No matter what, the landlord must act in accordance with the lease agreement and local tenancy laws throughout this process to ensure that everyone's rights are protected, and proper procedures are followed. 

If you're in this situation, don't underestimate the value of a dedicated commercial real estate lawyer. They can help you understand your rights and obligations as a landlord, protect your interests, and navigate any disputes with tenants in a professional, effective manner. 

Obligations of Commercial Landlords

Alongside their rights, commercial landlords have several obligations to uphold a fair and lawful landlord-tenant relationship. These responsibilities include: 

  • Providing a Safe and Habitable Environment: Landlords have a responsibility to ensure that the leased property is safe and comfortable for tenants. This includes keeping the property's structure sound and promptly addressing any building issues to avoid inconveniencing the tenant's operations. 

  • Compliance with Lease Terms: Landlords are also obligated to follow the terms of the lease agreement. They must adhere to the agreed-upon conditions regarding rent collection, property maintenance, and lease termination, among other things. 

  • Respect for Tenant's Rights: Landlords must respect the rights of their tenants while also enforcing their own. This respect means not disturbing the tenant's peace, privacy, and security. 

Exercise Your Rights

Understanding the rights of commercial landlords is essential for both landlords and tenants involved in commercial lease agreements. By familiarizing themselves with these rights, commercial landlords can protect their investments and ensure smooth operations. Likewise, tenants can navigate their obligations and negotiate favorable lease terms. 

If you encounter any legal issues or need further clarification on your rights and obligations as a commercial landlord, it's advisable to consult with a qualified commercial litigation lawyer like Matthew Harris of Matthew R Harris Law P.C. based in Toronto, Ontario. His firm serves clients throughout Hamilton, London, and Ottawa, providing tailored services and strong representation.