Commercial lease disputes arise when either the landlord or tenant fails to meet their obligations under the lease agreement. These disputes may involve:

• Failure to maintain or repair the property

• Unlawful rent increases

• Denial of quiet enjoyment

• Improper lease termination or eviction

• Withholding or forfeiture of deposit

• Disputes over common area maintenance (CAM) charges

• Damage to property or unauthorized renovations

• Refusal to allow subletting or assignment

• Relief from forfeiture applications

Commercial leases are governed by the Commercial Tenancies Act, R.S.O. 1990, c. L.7 ("CTA"), and are highly customizable. This means that the terms in your signed lease can override many default protections in the CTA. As such, legal advice when disputes arise is essential.

The Commercial Tenancies Act provides a legal framework for landlords and tenants. However, many disputes arise when parties either misunderstand or breach these rights and obligations.

Landlord Rights & Obligations

• Right of Re-entry: A landlord may repossess the premises if a tenant breaches the lease, particularly for non-payment of rent.

• Right of Distress (Distraint): A landlord may lawfully seize a tenant’s goods located on the premises to cover unpaid rent, without going to court. This right must be exercised carefully to avoid liability.

• Termination for Breach: Landlords may terminate a lease if the tenant violates key lease terms, such as failure to pay rent, unauthorized use, or abandonment of the premises.

• Notice Requirements: Before enforcing rights such as termination or distress, the landlord must generally provide written notice, allowing the tenant a reasonable opportunity to remedy the breach.

• Right to Sue for Damages: Landlords may also bring claims in Small Claims Court (up to $35,000) or the Superior Court of Justice for unpaid rent or damages arising from breach of lease.

Tenant Rights & Obligations

• Right to Quiet Enjoyment: Tenants are entitled to conduct their business without undue interference or harassment from the landlord.

• Right to Legal Action: Tenants may pursue claims in Small Claims Court or the Superior Court if the landlord fails to meet their obligations or breaches the lease.

• Obligation to Pay Rent: Tenants must pay rent in full and on time, regardless of unrelated landlord breaches, unless the lease provides otherwise.

• No Right to Withhold Rent: Withholding rent in response to landlord conduct is not permitted unless explicitly allowed in the lease.

Ontario’s Commercial Tenancies Act grants landlords significant tools to enforce lease terms—most notably termination, re-entry, and distress. These remedies can have serious consequences for tenants and must be used within the bounds of the law.

Distress (Distraint for Rent): Distress allows a landlord to seize a tenant's chattels (personal property) located on the leased premises if rent is unpaid. This remedy is unique to commercial tenancies and does not require court approval. However, landlords must:

1. Act without breaching the peace

2. Avoid seizing exempt property (e.g., tools of the tenant’s trade, in certain cases)

3. Notify the tenant prior to selling seized property

4. Improper exercise of distress may expose the landlord to claims for trespass or conversion.

Termination of Lease

1. A landlord may terminate a commercial lease for serious breaches, such as:

2. Non-payment of rent

3. Unauthorized use of premises

4. Breach of a material covenant in the lease

5. To terminate lawfully, the landlord must usually serve a notice of default, giving the tenant a reasonable opportunity to remedy the breach. If the tenant fails to comply, the landlord may:

6. Re-enter and change the locks, or

7. Commence proceedings in the Superior Court for possession

Tenants facing termination may apply for relief from forfeiture, asking the court to allow them to remain in the premises if justice requires it.

After valid termination, a landlord may peaceably re-enter the premises. This typically means entering when the tenant is absent and changing the locks without confrontation. Any re-entry that risks breach of the peace is unlawful and may entitle the tenant to damages.