Area of Law: Landlord and Tenant
Answer # 447
What law applies to commercial tenancies?Region: Ontario Answer # 447
Unlike residential tenancies, the law governing commercial leases generally treats landlords and tenants as equals, without giving tenants any additional protective rights. Although there are guidelines in place under the Commercial Tenancies Act, commercial landlords and tenants normally enter into a formal written agreement.
Generally, most commercial landlords and tenants enter into a formal written agreement, which follows a standard format, and includes basic issues, such as:
- amount of rent and rent increases,
- length of lease,
- consequences of arrears of rent, eviction of commercial tenant,
- breach of lease, and
- tenant’s rights and responsibilities when moving out.
If a landlord or tenant breaches the lease, they can be sued, and one remedy for a landlord when a tenant breaches a lease is for the landlord to have the tenant’s property confiscated and sold. The sale proceeds are then applied against the outstanding amounts owed to the landlord under the lease.
Before entering into a commercial lease, the parties usually consult their respective lawyers for many reasons, including:
- commercial leases are generally complex
- the costs associated with a lease are often a significant part of a business’s operating budget
- leases often require the tenant to give personal guarantees
- in many cases, the location of a business can be vital to its success.
For more information, refer to other sections of Legal Line or consult a business lawyer.
For additional information on commercial tenancies, visit the Ministry of Municipal Affairs and Housing at mah.gov.on.ca.
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For advice about commercial tenancies, you should consult a lawyer.
For legal advice and assistance with residential tenancies, contact our preferred Landlord and Tenant experts:
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