LANDLORD AND TENANT

COMMERCIAL

COMERCIAL TENANCIES ACT

Commercial  Landlords:

Rights and obligations

  • Landlords must notify tenants in writing of specific breaches of the lease and allow a reasonable  period of time for them to
  • Landlords may have the right to terminate a tenancy when tenants fail to fulfil their obligations as outlined in the
  • Landlords have the right to apply to the Superior Court of Justice (or depending on the amount, Small Claims Court) to seek damages from the tenant for the loss of rental income owed for the balanceof the term of the

    Commercial Tenants:

    Rights and obligations

    • Tenants must pay their rent on the due date agreed on in the lease with the
    • Tenants cannot hold back rent because a landlord has failed to fulfill their obligations as outlined in the
    • Tenants must fulfill their obligations as outlined by the  lease
    • Tenants have the right to take their disputes with the landlord to Small Claims Court for disputes concerning money or personal propertyunder

    $10,000. Other wise, an application must be made to the Superior Court of  Justice.

    Background

    Ontario’s Commercial Tenancies Act (the Act) outlines the relationship, rights and obligations between commercial landlords and  tenants.

    Legal Advice

    Whether you are a commercial tenant, sub-tenant or landlord, it is strongly recommended that you obtain legal advice to assist you with interpreting how the Commercial Tenancies Act applies to your specific situation.

     

     

     

    Leases

    It is important to be aware that a signed lease agreement may take precedence over the Commercial Tenancies Act.

    Typically a lease agreement sets out the specific obligations for both commercial landlords and tenants such as rent, maintenance, operating costs, leasehold improvements, and other matters.

     

    Both landlords and tenants should carefully read  their lease agreement as the majority of leases have terms and conditions that spell out the obligations   of each party.

    Non-payment of Rent

    When a tenant has failed to pay the rent, the landlord has two options available:

    OPTION 1: Change the  locks

    A landlord may change the locks of the unit and evict on the 16th day after the day rent was due. The landlord is not obligated to notify the tenant that the locks  will  be changed.

    Example

    January 1st – rent due

    January 17th – locks can be changed without notification

➤ Note

  • Landlords and/or tenants should not force their way into  the
  • After the locks have been changed, landlords should allow  tenants  reasonable  access  to  the  rental  unit to remove their

OPTION 2: Seize and dispose of a tenant’s property A landlord  may  seize  and  dispose  of  a  tenant’s property that is contained within the rented premises.

The landlord is not required to give advance notice of seizing the tenant’s property, unless the lease provides for it. However, landlords are required to notify the tenant of the distress and the sum of monies required  to cure the default before proceeding to sell the seized property. Before disposing of seized property, the landlord must hold it for five days. If the proper   payment is made by the tenant in this five day period, the landlord is not permitted to sell the tenant’s

property. Other wise, after the proper appaisals are made, the property can be  sold.

Both landlords and tenants are advised to seek legal advice in their specific  situations.

Example

January 1st – rent due and not paid

January 2nd or later – seize tenant’s property and notify the  tenant  of  intent  to dispose

Five days after seizure – obtain appraisals and dispose of tenant’s property if the proper payment is not made by   the  tenant.

 

➤ Note

The Act requires two appraisals before selling or disposing of a tenant’s  property.

  • The proceeds from the disposal of  a  tenant’s property are to be applied to the rental arrears. In the event that proceeds exceed the amount of the arrears, a landlord is obligated to reimburse the excess amount to the
  • Some types of tenant property cannot be seized, for example, property that is leased orco-owned.
  • Sub-tenants who continue to pay the full rent cannot have their property seized if the head tenant failed to pay the rent to the landlord. In the event that a sub-tenant’s property is seized, the landlord would be required to return the
  • Commercial tenants who wish to dispute their landlord’s actions may apply to the Superior Court of

 

Rent Increases

Most commercial tenancy agreements outline in detail issues such as the amount of rent charged and frequency of rental fee  increases.

In the event that there isn’t a current tenancy agree- ment, the landlord may increase the rent by any amount at any time.

The Act does not regulate rent increases.

➤ Note

Landlords should always consider giving a tenant a reasonable notice of a rent increase in  writing.

 

Interest on Rent Deposits

Under the Act, a landlord is not required to pay interest on a commercial tenant’s security deposit.

However, it is possible that a lease agreement requires a landlord to pay interest on a security deposit or last month’s  rent.