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commercial lease agreements

Commercial Lease Agreements

As a landlord, if you choose to rent space to a business tenant, you may wish to enter into a written commercial lease agreement. A lease is a written contract that helps ensure both the tenant and the landlord know what their rights and responsibilities are.

There is no such thing as a standard commercial lease because business needs are different, but there are some major aspects that most commercial leases would include. For example:

  • the amount of rent
  • the amount of deposit
  • any insurance requirements
  • maintenance and repair obligations
  • how to renew or end the lease
  • the length of the tenancy and type of tenancy (whether it’s on a month-to-month basis or fixed-term)
  • other rental agreement terms that have been negotiated between the tenant and the commercial landlord

As commercial leases vary, think carefully about the amount of space and amenities needed to operate your business and make sure they are covered under the lease. For example, if you need to renovate a commercial space for a dance studio, make sure the lease outlines who will pay for these leasehold improvements.

It is highly recommended that you speak to a lawyer on how to negotiate and write up a lease that suits your needs.

How to end a lease

The Commercial Tenancies Act has regulations on how a lease can be ended.

Fixed-Term Leases

No notice is required to end a fixed-term lease. You must have vacated the rental space on the date outlined in the lease. If you and your landlord agree to continue with the tenancy agreement, be sure to get together to take steps to renew or amend the lease before it expires.

For Month-To-Month Tenancies

In a “month-to-month” tenancy, you or the landlord must give written notice at least 1 month in advance. The last day of the tenancy would be the last day of the month.

For example, if you plan to end your lease on June 30, you must give your landlord written notice no later than May 31.

Lease Terms

A lease can also have rules about how to end a tenancy. These rules must be followed, as they form part of your contractual agreement, even if they are different from the Commercial Tenancies Act. For example, as a tenant, you have to pay the rent for the length of the lease agreement – unless you negotiated terms that would allow you to end the commercial lease agreement early.


Your landlord can end your tenancy or seize your goods if you do not pay rent on time. They cannot do both. For example, if you, as a tenant, do not pay your rent 16 days after the rent is due, your landlord can, without notice, end your tenancy by changing the locks on the unit and evicting you. You can also be evicted for not following the terms of your lease.

What if there’s a dispute?

Commercial landlord and tenant disputes are private disputes. The provincial government does not get involved. If you need assistance with a commercial lease agreement or are a defendant in a lawsuit, contact a lawyer for assistance.

What should you do if a commercial lease agreement has been breached?

  • A tenant can breach a lease agreement, for example, by failing to pay rent, doing something prohibited by the lease, or moving out before the lease expires
  • A landlord can breach a lease agreement by failing to provide utilities, maintenance, or by interfering with a tenant’s business operations
  • In the event of default, review the terms of the lease agreement carefully
  • While some disputes can be resolved with negotiations, remember to document any such agreement in writing
  • Whether you’re a landlord or tenant, consult a lawyer for options

Speak to an Ontario Commercial Leasing Lawyer for free by telephone, WhatsApp, WeChat, Text Messaging (SMS) or Zoom.