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Understanding the Rights of Commercial Tenants

Matthew R Harris Law P.C. Jan. 5, 2024

Commercial BuildingsCommercial leasing can be a complex area of law with unique challenges and considerations. Whether you're a new business owner navigating your first lease agreement or an established entity renegotiating terms, understanding your rights as a commercial tenant is paramount. 

In Canada, commercial tenancy laws vary by province, each providing different mechanisms and protections for both landlords and tenants. Commercial tenants have specific rights under these guidelines, including the right to a safe and habitable space, privacy, and the right to be free from unreasonable rent increases.  

This blog aims to illuminate the truth of commercial tenant rights in Canada, providing a comprehensive guide for business owners to navigate this often-challenging terrain. Topics to be explored involve the key areas of commercial tenancy, including negotiating lease agreements, understanding the rights and responsibilities of both parties, and the legal options available to tenants when issues arise. 

Intro to Commercial Tenancy Laws in Canada

Commercial tenancy refers to a legal agreement between a landlord and a tenant for the use of a space or property for commercial purposes. This covers activities such as running offices, retail stores, warehouses, and other business-related ventures. It's noteworthy that these laws differ from residential tenancy laws, which have their own separate legislation. Commercial tenancy laws in Canada also aren't uniform across the board. They're governed by individual provinces and territories, each with its own unique set of regulations.  

Ontario Tenancy Laws 

For instance, Ontario has its own unique set of rules governing commercial tenancies called the Commercial Tenancies Act. This law defines the rights and responsibilities of both landlords and tenants involved in commercial leasing within the province. Here are a few examples: 

  • For month-to-month leases, a written notice of lease termination must be given at least one month in advance.  

  • Fixed-term leases don't require written notice for lease termination. The fixed term itself serves as the basis for termination.  

  • Landlords can change the locks without prior notice on the 16th day after the rent was due, effectively ending the tenancy. 

Ontario's Landlord and Tenant Board (LTB), the sole tribunal responsible for resolving disputes between landlords and tenants, has been grappling with a significant backlog that spans multiple years. As of May 2023, the LTB was burdened with over 38,000 unresolved cases, with nearly 90 percent of those complaints originating from landlords. This backlog has raised concerns about the efficiency and effectiveness of the board's operations. So if a landlord has raised a concern about your tenancy, prepare for a potentially lengthy process. And get familiar with your tenancy rights.  

Your Rights as a Commercial Tenant

Your rights as a commercial tenant are primarily outlined in the lease agreement. They'll also be regulated by provincial or territorial commercial tenancy laws like the ones we just touched on above.  

The terms and conditions of the lease mustn't be illegal or criminal. So if you come across any unclear provisions, it's highly recommended to consult with your landlord or a property leasing lawyer—like Matthew Harris—for clarification.  

Key Terms and Conditions of a Commercial Lease 

A commercial lease agreement is essentially a roadmap that outlines the rights and obligations of both the landlord and tenant. It's vital to thoroughly review and understand its terms and conditions to protect your rights. These include the amount and method of rent payment, the duration of the lease and conditions for renewal or termination, security deposits, insurance requirements, and responsibilities for repairs and maintenance. Restrictions on the use of the space or property might also be outlined in the agreement. 

Rights in Case of Late or Unpaid Rent 

Commercial tenancy laws also provide guidance on landlord and tenant rights in case of late or unpaid rent. In Ontario, for instance, landlords have the option to change the locks on the 16th day after the rent was due or seize the tenant's property found within the leased premises to cover the unpaid rent. Tenants need to be aware of their rights and the actions that landlords can legally take in such situations. 

Termination of Lease and Notice Requirements 

The termination of a commercial lease can occur in several ways depending on the type of lease agreement. For month-to-month leases, both parties must provide written notice at least one month in advance. In the case of fixed-term leases, no written notice is needed as the lease termination is based on the fixed term. However, always review the lease agreement for any specific notice requirements stated within. 

Violations of Commercial Tenant Rights

Violations of commercial tenant rights can occur when there is a breach of any term or condition in the lease contract or when the contract is terminated without prior notice or for reasons not specified in the contract. In such cases, it's advisable to consult with a lawyer like Matthew Harris to understand your options and take appropriate action against the landlord. 

The Importance of Seeking Legal Advice

To fully understand and protect your rights as a commercial tenant, you should consider consulting with a property leasing lawyer. These professionals are well-versed in commercial tenancy laws and can provide guidance based on your jurisdiction and circumstances. Don't hesitate to reach out to reputable property leasing lawyers for expert advice and assistance. 

Remember, knowledge is power. Understanding your rights as a commercial tenant empowers you to make informed decisions and protect your business interests

Contact a Lawyer Today

Matthew R. Harris Law P.C. is located in Toronto, Ontario, and works with people throughout Hamilton, London, and Ottawa. Reach out today to learn how their lawyer can help you handle any commercial tenancy issues.