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Breaching a commercial lease

Region: Ontario Answer # 451

Under the law, a lease may be considered breached if a landlord or tenant fails to live up to one or more of the lease obligations, or conversely, does something that is strictly prohibited in the lease or that is illegal.

 

Tenants’ breach

Non-payment of rent: Failing to pay the rent is the most common material breach committed by tenants. In such cases, commercial landlords have the option to re-enter the premises and change the locks, sell the tenant’s property, sue the tenant for any rent that remains outstanding, and terminate the lease.

Moving out before lease expires: A tenant is commonly considered to have breached the lease if he or she moved out before the lease expired. Generally, if a commercial tenant wants to vacate the premises earlier than the lease allows, the tenant will have to get written agreement from the landlord or the tenant may be responsible to pay rent for the entire duration of the lease. Under the law, a landlord is required to seek a new tenant, but if the landlord cannot find one, or loses any money because the old tenant breached the lease, the landlord may be able to sue the tenant. If a tenant wants to vacate the premises early, a lawyer should be consulted about the possible consequences and options.

Failing to fulfill other obligations of lease: In addition to paying rent, tenants are usually responsible to fulfill obligations, such as maintaining insurance for their premises and its contents, and using the premises for only the purpose set out in the lease. If the tenant fails to do the things that they are responsible for under the lease, it is considered a breach. Whether the landlord can terminate the lease, sue the tenant, or take other legal action based on the breach will depend on the seriousness of the breach and how important the obligation is.

Does something prohibited by lease or the law: A tenant can also be considered in breach of a lease if they commit an act that is expressly prohibited by the lease, or if it is illegal. If the breach is considered a material breach, the landlord will be able to take legal action to remedy the problem or to terminate the lease. If the breach is considered to be illegal, the police may close down the operation and charge the tenants criminally.

 

Landlords’ breach

Many commercial leases do not require the landlord to do much other than allow the tenant to use the premises. However, if the landlord does not meet certain obligations that are in the lease, such as providing utilities or maintenance services, he or she may have violated the lease.

Even if a landlord violates the lease terms in some way or interferes with the tenant’s business operations, the tenant normally does not have the right to stop paying rent. Instead, the tenant may apply to court to have a judge order the landlord to fulfill the obligations or sue for damages suffered.

For additional information on commercial tenancies, visit the Ministry of Municipal Affairs and Housing.

If you are a commercial landlord or tenant who wants to break a lease or start legal action, you should consult a lawyer.

Help for tenants

A criminal record will affect your ability to be approved for a commercial lease. To erase your criminal record, learn more at Pardon Partners. It’s easier than you think.

If you are having financial problems, it may be difficult to rent an apartment or condominium. You can get help to clear your debt and repair your credit. For easy-to-understand debt solutions on your terms, contact our preferred experts 4Pillars and rebuild your financial future. With 60 locations across Canada, they will help you design a debt repayment plan and guide you with compassionate advice. No judgment. For help, visit 4Pillars or call toll-free 1-844-888-0442 .

If you are a tenant, you can add your monthly rent payment to your credit report using FrontLobby . This can:

  • Improve your credit score on average 33pts to 84pts
  • Build good credit faster with a new rent tradeline
  • Unlock credit rewards (better bank loans, credit cards, mortgage rates)

Help for landlords

For legal advice and assistance with a residential tenancy and applications to the Landlord and Tenant Board, contact our preferred Landlord and Tenant experts Nicola (Nick) Giannantonio Legal Services .

If you are a landlord, you can pull tenant credit reports and report monthly rent payments to the credit bureaus using FrontLobby . This helps you:

  • Attract, screen and reward great tenants
  • Ensure rent is paid on-time, every month
  • Recover debts from unpaid rent

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4Pillars Landlord & Tenant Ontario All Topics May 20184Pillars Landlord & Tenant Ontario All Topics May 2018

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