There are significant legal differences between residential tenancies and commercial tenancies. Evicting a tenant within the context of a residential tenancy requires an Order from the Landlord and Tenant Board, whereas the process for eviction in a commercial tenancy is much more straightforward, and does not require the landlord to commence a lawsuit.
Most commercial leases include reasons why and how landlords may evict commercial tenants. The most popular reason is, of course, non-payment of rent or for some violation of the lease, typically referred to as a “material breach” of some important requirement set out in the lease agreement.
Eviction for non-payment of rent
Sometimes commercial tenants simply fail to pay their rent. Such circumstances are governed by the Commercial Tenancies Act.
First, the landlord may re-enter the premises, which typically involves changing the locks and preventing the tenant from using the rented premises. However, there are important deadlines to keep in mind. Commercial landlords are required to wait 16 days after the rent was due before re-entering and changing the locks.
Landlords also have a second option. Upon re-entry without notice, the landlord may seize and sell the tenant’s property. As one can imagine, this is a very serious step, and there are, again, certain requirements that must be followed. For example, before selling the tenant’s property, the landlord must provide the tenant with five days’ notice.
Eviction for a material breach
It’s quite common for commercial leases to include several duties and obligations that tenants must observe in addition to simply paying the rent in full and on time. If the tenant fails to perform such obligations or does something that is not permitted under the lease, then the landlord may be able to terminate the lease and evict the tenant. All steps in the process must be carried out in compliance with the Commercial Tenancies Act, and it is prudent to engage a commercial litigator for such circumstances, as failure to observe the act may expose the landlord to liability.
Despite that level of detail typically involved in commercial leases, the situation is not always clear whether the tenant has breached the lease. In those cases, the landlord may wish file an Application in Court so that a Judge may decide if the tenant has breached the lease. Keep in mind that any such Court proceeding would provide an opportunity to the tenant appear at the hearing to make arguments as to why they did not breach the lease and/or should not be subject to eviction.
If you are a commercial landlord in Ontario, or you represent one, feel free to contact us for a consultation.