REALWorld Law

Commercial leases

Early termination

Can a tenant be forced to leave prior to the date originally agreed and, if so, how long will this process take?

Canada

Canada

Absent a specific term included in the lease permitting the landlord to prematurely terminate the lease, or unless the tenant has breached a term of the lease, a commercial lease cannot be terminated before its term concludes. Most commercial leases contain a term permitting early termination upon the non-payment of rent, the destruction of the building or the breach of another material lease term. Rights of a landlord or tenant to terminate a residential tenancy is strictly regulated by statutory provisions under the applicable Provincial or Territorial legislation and specific advice should be sought.

In situations where the tenant has breached a non-essential term of the lease, the landlord may issue a notice of breach and, if the breach is not rectified within the time frame specified by the lease and recorded on the notice, the landlord may terminate the lease. Breach of an essential term of the lease may, in certain circumstances, entitle the landlord immediately to terminate the lease by notice or by re-entry.

Where the landlord becomes entitled to repossess the property, it may generally do so either by an express power of re-entry under the lease or by obtaining a Court order for possession. The landlord may need to comply with notice requirements under the relevant Provincial or Territorial legislation. Canadian courts and tribunals may allow tenants relief from forfeiture of the lease and allow them to rectify breaches of the lease and retain possession of the premises, except in the most aggravated circumstances. For example, if the tenant pays rent arrears then the court may allow it to remain in the premises and exercise any option for a further term, unless there is a long history of rent arrears.