REALWorld Law

Commercial leases

Changes in rent

If the rent is to be changed or increased how will the new rent be determined?



Under the ALBL, if the current rent amount has become ‘unreasonable’ and the parties cannot reach an agreement regarding a new amount, the parties must first apply for mediation to resolve the dispute before turning to the courts for resolution.

Should the court become involved, it will take several factors into account when determining a new ‘reasonable’ rent amount:

  • whether the current rent amount differs significantly from rent amounts in similar leases located in the same vicinity;
  • the appraised market rent as determined by a real estate appraiser;
  • any changes in taxation rates relating to the premises; and
  • any fluctuations in real estate prices or other economic circumstances.