If you operate (or are thinking about operating) a business in Ontario, you’ll likely need to rent commercial space to support your business operations. However, commercial tenancies differ from residential tenancies, leaving many prospective tenants wondering: do commercial tenants have rights? 

Below, we’ll answer some commonly asked questions about the rights and obligations of commercial tenants in Ontario alongside resources to help you better understand your rights in commercial tenancy scenarios. 

What is a Commercial Tenancy?  

Before getting into the rights of commercial tenants, it’s important to outline the features of commercial tenancy. Essentially, commercial tenancies refer to contracts between landlords and business tenants (as opposed to residential tenancies, where a tenant rents space for their personal use from a landlord). 

Commercial leases can be complex given the variable nature of how businesses operate (and what businesses need to continue operating). For example, a commercial lease might allow for using certain types of equipment in the space, renovations, or other unique property-use clauses. 

Ultimately, the terms of a commercial tenancy will depend heavily on the terms outlined in the commercial lease—which is why it’s critical to ensure your commercial lease is reviewed by an experienced commercial lease lawyer before you sign to ensure you protect your rights and interests. 

The Rights of Commercial Tenants in Ontario 

In Ontario, the Commercial Tenancies Act, R.S.O. 1990, c. L.7 outlines some of the rights and obligations of commercial tenants. We’ll discuss some of those rights and obligations below. 

However, remember that the terms of a commercial lease can take precedence over the rights and obligations outlined in the Commercial Tenancies Act, R.S.O. 1990, c. L.7, and other laws. That’s why speaking with an experienced commercial lease lawyer is essential if you have questions or concerns about your rights and obligations under a particular commercial lease. 

What Must a Commercial Landlord Provide By Law? 

The Commercial Tenancies Act, R.S.O. 1990, c. L.7 does not provide significant guidance on what a commercial landlord must provide by law. Depending on the commercial lease terms, a commercial landlord may be required to provide various amenities and services to a commercial tenant. These possible amenities and services include repairs and maintenance obligations. 

Under the Conveyancing and Law of Property Act, R.S.O. 1990, c. C.34, however, commercial tenants have the right to “quiet enjoyment.” In other words, tenants have the right to minimal interference in their leased space, and conversely, landlords must minimize interference. Determining whether a breach of quiet enjoyment has occurred is a facts-based consideration that will depend on the nature of the alleged breach and its impact on the tenant, along with the terms of the commercial lease. 

How Much Can Commercial Rent Increase in Ontario? 

There are no limits on rent increases in the Commercial Tenancies Act, R.S.O. 1990, c. L.7, meaning that a commercial landlord is entitled to raise the rent at the end of a tenancy (and, if there is no tenancy agreement, a commercial landlord can increase the rent in the amount and frequency of their choosing). 

And, while best practice suggests that commercial landlords should provide their tenants with reasonable notice regarding a rent increase, there is no requirement to do so under the Commercial Tenancies Act, R.S.O. 1990, c. L.7.

Therefore, commercial tenants should be wary of commercial leases that do not provide guidance on the amount or frequency of rent increases. 

How Can I End a Commercial Tenancy? 

The rules for ending a tenancy depend on whether you have signed a month-to-month or fixed-term commercial lease. 

For a month-to-month commercial lease, the commercial tenant (or the landlord) must provide one month’s written notice of their intention to end the tenancy under s. 28 of the Commercial Tenancies Act, R.S.O. 1990, c. L.7.

For a fixed-term commercial lease, the tenancy ends on the date specified in the lease (though, if the parties choose to do so, they may renew it). Note that if a commercial tenant or landlord wishes to end a commercial lease early, they can incur significant financial and legal consequences (as we outline further in our blog post, What You Should Know About Breaking a Commercial Lease). 

Can I Sublet Commercial Property? 

As noted above, ending a commercial lease early can have significant consequences. Some commercial tenants may instead try to “sublet” the property until the fixed-term contract ends. Under s. 23 of the Commercial Tenancies Act, R.S.O. 1990, c. L.7, commercial landlords must not “unreasonably withhold” a commercial tenant’s right to sublet a property unless the commercial lease prohibits it. 

What Happens If I Am Unable to Pay Rent? 

Failing to pay rent for your commercial lease on time can have significant consequences. Under the Commercial Tenancies Act, R.S.O. 1990, c. L.7, commercial landlords can either change the locks and evict the tenant 16 days after the rent was due or seize and sell eligible property inside the commercial property (also referred to as “distress”). 

While a commercial landlord is not required to notify a commercial tenant that they are evicting them or that they are seizing property (as the case may be) unless specified in the commercial lease, they must notify the tenant before they sell the seized property. 

Do Commercial Tenants Have Rights? Final Thoughts

Commercial tenants often have fewer rights than residential tenants. As a result, commercial tenants must understand their rights and obligations under the Commercial Tenancies Act, R.S.O. 1990, c. L.7, and those outlined in their commercial lease. 

Before entering into a commercial lease, carefully consider the rights and obligations outlined in the Commercial Tenancies Act, R.S.O. 1990, c. L.7 AND the commercial lease itself, keeping in mind that the terms of a commercial lease can alter or supersede the rights provided by the legislation. 

Keep in mind that commercial lease terms can be added or negotiated by the parties before signing. To that end, commercial tenants need to consider whether the commercial lease is silent on essential terms or whether they want terms in the commercial lease to be amended before signing. 

It’s worth speaking with an experienced commercial lease lawyer in all commercial lease cases. They are not only familiar with the relevant legislation and rights and obligations of commercial tenants but can help you draft and negotiate terms for a commercial lease that will protect your interests and minimize your risk. 

Contact the Commercial Leasing Lawyers at Tierney Stauffer LLP in Ottawa, Cornwall and Kingston

Tierney Stauffer LLP’s experienced commercial lease lawyers help both commercial landlords and tenants at all stages of a commercial lease—from drafting the initial contract to representing parties in commercial lease disputes. 

Our team has extensive experience representing clients in real estate and business matters and the know-how to help clients with various commercial leasing matters. For assistance with commercial leasing matters, call us at 1-888-799-8057 or contact us online to schedule your consultation today. 


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