If you're stepping into the role of a commercial landlord in Canada, it's vital to understand what's expected of you. This guide is your easy-to-follow roadmap for knowing what your obligations as a commercial landlord are. We'll cover what you need to know about Canadian commercial property laws and how to handle lease agreements.
Read on to find out more about commercial landlord obligations.
What are Canada’s commercial tenancy laws?
To understand a commercial landlord’s obligations, it is better to understand the commercial tenancy laws of Canada first. These laws will tell us what these obligations are, and how and when these obligations apply to a commercial landlord.
Commercial vs. residential
Both landlords and tenants must know that there are different Canadian laws that apply to commercial leases and residential leases. In some ways, the obligations of commercial landlords and tenants may be stricter than their residential counterparts.
There are also specific provincial or territorial laws that apply only to commercial leases, the same way that there are separate laws for residential leases. Ontario, for example, has the Commercial Tenancies Act and the Residential Tenancies Act. Other provinces may or may not have similar laws.
Common law on commercial leases
Canada’s common law principles on commercial leases cover commercial landlord obligations, among other aspects.
Having a property leasing lawyer is important, not only when there are conflicts between you and your tenant, but even from the first engagement. For instance, having a lawyer draft the commercial lease agreement is recommended, since they know the common law principles that must be included in the agreement.
Canadian law on contracts
Aside from common law principles on commercial leases, another important set of laws that applies to commercial landlord obligations is the Canadian law on contracts.
When we say that the relationship of a landlord and a tenant is contractual in nature, it means that their lease agreement is the main source of their rights and obligations.
Generally, the lease or rental contract between you and your tenant will prevail over the provincial and territorial laws on commercial leases. The only caveat: the terms and conditions of your contract must not be illegal.
For an overview of commercial lease agreements, watch this video:
For more information on commercial landlord obligations, contact a property leasing lawyer in your area. If you’re in Calgary or Edmonton, consult with one of the Lexpert-ranked best property leasing lawyers in Alberta.
Provincial and territorial laws on tenancies
As discussed above, the different Canadian provinces and territories have enacted their own laws on commercial leases. There are similarities and differences between them.
These laws, along with the common law principles (and Civil Code in Québec), provide additional sources for outlining your obligations as a commercial landlord.
What are obligations of a commercial landlord?
Below are some of the important commercial landlord obligations in Canada. These should be included in your lease or rental agreement. Contact a property leasing lawyer on the variation of these obligations according to your provincial or territorial law on commercial leases.
1. Obligation to respect the lease or rental agreement
One of your most important obligations as a commercial landlord is to respect the lease or rental agreement by following its terms and conditions.
When drafting the agreement, you and your tenant must understand it and consent to whatever terms are included in it.
This is where a property leasing lawyer is needed – to draft and check the agreement, making sure it’s fair for both parties.
After the agreement has been signed, it’s also equally important to be familiar with it and refer to it whenever issues arise. Having a legally sound agreement will save you and your tenant’s time and energy from lengthy legal battles.
2. Obligation to maintain and repair the property
It is a general impression that part of your commercial landlord obligation is to maintain the leased property and do major repairs. It can also be agreed that some of the minimal maintenance works will be shouldered by your tenant, or even the major ones but subject to certain concessions.
Aside from being a contractual obligation, regular maintenance of the property is also needed to prevent any accidents because of the alleged negligence on your part as a landlord. This includes regular inspection of the property (with prior notice to the tenant) and being responsive when the tenant raises concern over a major maintenance work.
3. Obligation to comply with other laws
Aside from the provincial or territorial laws on commercial tenancies, there are also other laws which form part of your commercial landlord obligations. This may include getting the necessary permits for your business (or your tenant’s business), zoning laws, parking laws, among others.
When in doubt about these other laws, consult a property leasing lawyer in your area.
4. Obligation to follow eviction and termination procedures
When evicting a tenant or when terminating the lease, you must look at two things: your lease agreement, and the provincial or territorial law on commercial leases.
If the provincial or territorial law prescribes a different procedure than what is in your agreement, it’s important to consult a property leasing lawyer. In most cases, your agreement may prevail over the law, so long as it’s not criminally illegal.
Some steps that must be taken when evicting a tenant includes:
- giving prior notice to the tenant
- allowing the tenant some time to correct the wrongs, which were the grounds for terminating the lease
These contractual procedures in evicting a tenant cannot be changed without following the rules on amending the agreement. This again highlights the importance of consulting a lawyer when drafting the agreement. The grounds and procedures for evicting a tenant must be detailed in the agreement with the help of your lawyer.
Contact one of the best property leasing lawyers in Canada as ranked by Lexpert to know more about your obligations as a commercial landlord.