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Ontario|Landlord & TenantCommercial Landlords & Tenants 449 Eviction Most commercial leases state the reasons why and how a landlord can evict a commercial tenant. Normally, there are two main reasons why a landlord is entitled to evict a tenant: first, for non-payment of rent or second, for failure to perform a material term of the lease.
- Eviction for non-payment of rent
If a tenant fails to pay rent, the landlord is entitled to "re-enter" the premises, which usually includes changing the locks and preventing the tenant from using the premises any longer. Unless the lease requires the landlord to give the tenant notice, the landlord may be able to terminate the lease and evict the tenant if the tenant does not pay the rent on time. For additional information on the steps a landlord can take if a commercial tenant does not pay rent, refer to other sections of Legal Line .
- Eviction for not fulfilling obligations in the lease
A commercial lease may also contain other obligations that the tenant is responsible for. If the tenant does not perform such obligations, the landlord may be able to terminate the tenancy and take over the premises but must do so in compliance with the Commercial Tenancies Act.
It is not always clear whether the lease has been breached. In some cases the landlord may apply to a court to have a judge decide if the tenant has breached the lease, and if so, to have the lease terminated. If a landlord applies to court, the tenant will be given the opportunity to appear at trial to argue their side.
If a landlord wants to evict a commercial tenant or take them to court, they should consult a lawyer.
450 What can a landlord do if the tenant is in arrears?
Paying rent on time is usually the main obligation of a commercial tenant. Most commercial leases state what a landlord can do if a tenant does not pay the rent on time. Normally, there are three possible options for a landlord: first, to terminate the lease and sue for arrears and future loss, second, to sue the tenant for arrears and maintain the tenancy agreement, or third, to seize the tenant's goods and furniture and sell them to pay off the arrears.
- Landlord's right to re-enter the premises if the rent is not paid
First, it is common in commercial leases that the failure to pay rent entitles a landlord to "re-enter" the premises, which usually means that the landlord can change the locks and prevent the tenant from using the premises any longer. Unless the lease requires the landlord to give the tenant notice, the landlord may be able to terminate the lease and evict the tenant as soon as the tenant does not pay the rent on time, even if it only happens once. Or, the landlord may choose to apply to court to have the tenancy terminated and the tenant will have an opportunity to explain why they could not pay rent. If the tenant has temporary financial difficulties and otherwise acted in good faith, a judge may not terminate the tenancy.
- Suing a tenant for arrears of rent
Second, a landlord also has the option of suing the tenant for the arrears of rent. Even though a landlord can usually terminate the tenancy immediately, the landlord and tenant may disagree about how much rent is owing, or the landlord may not want to have to find a new tenant but still wants to collect the outstanding arrears. If the landlord does not apply to terminate the lease or does not terminate it by taking over the premises and changing the locks, then the lease continues even though the tenant is being sued for arrears. If the judge finds that the tenant is in arrears, the tenant will be ordered to pay the landlord.
- Distress: a landlord's right to sell the tenant's property
Third, if a landlord wants to collect arrears of rent but does not want to terminate the tenancy by taking over the premises and changing the locks, or does not want to sue the tenant, they usually have the right seize the tenant's goods and furniture and sell them to recover the arrears. Under the law, this is called distress. If the landlord does not recover the entire amount from the sale of goods and furniture, they may be able to sue the tenant for the remaining amount owing. Once the landlord recovers the arrears, they no longer have the right to terminate the tenancy.
Before taking steps to evict a tenant or collect arrears, a landlord should consult a lawyer.
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