Canada: Finding The "Good" In Goodbye: How To End A Commercial Tenancy

Last Updated: September 23 2013
Article by Laurie Sanderson

So your tenant is late paying the rent – again. Only this time, you've reached your limit and you want to terminate the lease. In Ontario, commercial landlords are in the enviable position of not needing to obtain a court order to repossess their premises (re-enter in legal speak) and terminate the lease. The Commercial Tenancies Act gives us the right to do so, without the intervention of the court, provided we follow certain required steps.

STEP 1 – Ensure that you have not waived your rights

If the tenant has persistently paid its rent late, and you have accepted late payment, you may have waived your right to require strict performance of the tenant's obligation to pay the rent on the first of the month. Likewise, if the tenant habitually fails to remain open for business during the operating hours of the mall despite its promise in the lease to the contrary, you may by your conduct be found to have acquiesced in this default or waived your right to strictly enforce this term of your lease. As I always say, no good deed goes unpunished. So much for being nice.

Not to worry however, the waiver is not forever and can be dealt with by sending the tenant a formal notice advising the tenant that its rent is due on the first of the month and that from that time you will be strictly enforcing this obligation under the Lease.

STEP 2 – Read the default section of the lease

If this is a rent default, check the terms of the lease to see if you are required to give the tenant notice of the rent default or whether you have to wait a certain period of time after the rent was due before you can treat it as in arrears. Most leases will say that the landlord can terminate the lease if the rent is not paid when due. Assuming rent is payable on the first of the month, this means that we can repossess the premises on the 2nd of the month. If your lease is silent, however, you must wait 15 clear days (that is, until the 17th of the month) before doing your re-entry.

If the tenant's default is for something other than its rent obligation, despite what your lease may say to the contrary, you must give the tenant notice of the default and reasonable time to cure the default before you will be entitled to terminate the lease.

STEP 3 – Be sure that the tenant is in default

One of the consequences to being given the right to terminate without a court order, is that we are held to a very high standard in exercising this self-help remedy. You want to be very sure that your tenant is indeed in default. If we are dealing with a rent default, you will want to exercise your right to terminate the lease only on the basis of arrears that are indisputably owing. If you and your tenant are having a dispute over operating cost adjustments, I strongly suggest that you not include these arrears in your notice of termination. You are just inviting your tenant to challenge the re-entry in court and if, at the end of the day, the judge disagrees with you, your re-entry is not just tainted, it will be found to be unlawful. Suddenly, it is not the tenant behind the eight ball, but you. The damages for an unlawful re-entry can be extremely high. From the court's point of view, you have unlawfully interfered with your tenant's business operations and quite probably injured its reputation with its customers and suppliers.

STEP 4 – Be strategic

A tenant who pays the arrears into court is entitled to have its lease re-instated. (It is what the law calls relief from forfeiture.) So it does not make sense to terminate the lease for a single month's rent default if we believe that the tenant has the ability to pay.

When you read the default provisions of the lease, did they refer to the current month's rent and the next three month's rent accelerating as a consequence of any event of default? Most commercial leases do. Once upon a time this accelerated rent provision was limited to the tenant being insolvent but in the past decade or so, most landlords' leases have been amended to extend this provision to any event of default.

If your lease permits the acceleration of the next 3 month's rent, you will need to first confirm whether the acceleration is automatic (ie the rent accelerates as soon as the tenant defaults without any action on your part) or whether it is not triggered until the tenant has been given notice and time to cure the default. If this is the case, you will want to advise the tenant of the acceleration in your default notice. Why is acceleration relevant to this discussion? We want to make it as expensive as possible for the tenant to apply to have its lease reinstated.

Along these lines, we also want to make it as difficult as possible. The tenant's right to apply to the court to have its lease reinstated is not limited to curing a rent default. It extends to other lease defaults as well but with a few exceptions, the most relevant one being a breach of the restrictions in the lease against assignment and subletting. If you terminate the lease for a breach of this nature, the tenant is not entitled to court ordered relief.

If we have a tenant that is both in arrears and in breach of other terms of the lease, it may make sense to take the extra step, give the tenant notice of the non-rent default and reasonable time to cure, before doing the re-entry, as it will make it more difficult for the tenant to have its lease reinstated.

This will not apply, however, when we believe that the tenant is insolvent. In these cases, we need to terminate the lease as quickly as possible. If the tenant assigns itself or is petitioned into bankruptcy before we terminate the lease, we are stayed – meaning our hands are tied. We are not permitted to exercise any of our remedies against the tenant. Worse, we must wait 90 days while the trustee in bankruptcy decides whether it is going to disclaim (walk away from) the lease or whether it will exercise its right to assign the lease to someone else. Beware, the trustee is not bound by the use restrictions in the lease and is legally permitted to assign the lease to someone to use the premises for a use other than the permitted uses under the lease.

If we believe that the tenant is on the cusp of bankruptcy, we will want to terminate the lease as quickly as possible. As such, we will almost always re-enter on the basis of the rent default so that we are not having to give notice of default to the tenant and time to cure.

STEP 5 – Use a bailiff

Unless you have terminated a lease before and this is a very clear cut case, as for example, where the tenant is in arrears and abandoned the premises, you will want to engage the services of a qualified bailiff. The bailiff is your best friend. They have done this a thousand times before and know how to effect the re-entry in as painless and drama-free way as possible.

The bailiff gets their authority by way of a warrant from the landlord. The bailiff will send you the form to sign. The only amendment I ever make to the bailiff's form of warrant is to limit the indemnity to its "lawful" acts. The bailiff will also prepare the notice of termination for you.

Generally speaking, it is very easy to effect the termination. We almost always do this by changing the locks on the premises and posting the notice of termination on the inside of a window or door so that it is visible (but not removable) from the outside. I also send a copy of the notice of termination to the tenant by email as well as a copy to their lawyer.

The bailiff will want to know how many exterior doors there are in the premises, what kind of lock is being used and whether the premises are alarmed. The bailiff will also want to do the re-entry when the premises are not occupied so will also ask you about the operating hours of the tenant and when we can be reasonably sure that the premises will be vacant.

Neither you nor the bailiff can use force to effect the re-entry. If the tenant stands in the doorway and refuses us access we will need to come back another time.

STEP 6 – Do not seize the tenant's chattels

By terminating the lease, you are forfeiting your right of distress. (This is the landlord's right to seize the tenant's chattels for non-payment of rent.) To avoid any confusion or allegation to the contrary by the tenant, I include in my notices of termination, a statement to along the following lines:

This notice of termination of the Lease, any changing of the locks at the Leased Premises and the termination of the Lease shall not constitute a seizure by the Landlord under any security agreement by the Tenant in favour of the Landlord, if any, or in favour of any other person, of any chattels or other personal property belonging to the Tenant and remaining on the Leased Premises. Please contact the Landlord at (Tel.) in order to arrange for the removal of your property from the Leased Premises by ", 2013, failing which we will treat any remaining property as abandoned and will dispose of it without recourse by or compensation to the Tenant.

Be aware that despite the warning to the tenant that we will dispose of their property, we are not entitled to do so unless this is specifically provided for in the lease. Otherwise, we are required to store the tenant's property and are not permitted to kick it to the curb.

STEP 7 – Reserve your right to claim damages

You are entitled to damages from the tenant as a consequence of the early termination of the lease. You must, however, claim these damages within a reasonable period of time after the termination of the lease. To be on the safe side, I include the following statement in the notice of termination.

The Landlord hereby also gives you notice that it will without further notice or demand hold the Tenant responsible for the base rent and additional rent due ", 2013, accelerated rent as provided in section " of the Lease and damages for the loss of the benefit of the Lease for the balance of the term of the Lease, including without limitation, base rent and additional rent that would otherwise have been payable for the balance of the term of the Lease but for this early termination.

STEP 8 – What if the tenant breaks back in?

Funnily enough, this happens fairly frequently; at least often enough for me to amend my notices of termination to include the following:



It doesn't always work but it has definitely helped. If the tenant breaks back in, it is often just to retrieve their personal property, and so it is easiest just to have the locks re-changed the next day. If, however, the tenant re-opens for business, you have a different situation on your hands and your safest route is to apply to the court for an order evicting the tenant (called a writ of possession).

Part of why I love my practice is that no two leases or tenants are ever the same. I hope that you will take all of the above comments as they are intended, as a guide and not a rule book.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
8 Nov 2016, Seminar, Ottawa, Canada

The prospect of an internal investigation raises many thorny issues. This presentation will canvass some of the potential triggering events, and discuss how to structure an investigation, retain forensic assistance and manage the inevitable ethical issues that will arise.

22 Nov 2016, Seminar, Ottawa, Canada

From the boardroom to the shop floor, effective organizations recognize the value of having a diverse workplace. This presentation will explore effective strategies to promote diversity, defeat bias and encourage a broader community outlook.

7 Dec 2016, Seminar, Ottawa, Canada

Staying local but going global presents its challenges. Gowling WLG lawyers offer an international roundtable on doing business in the U.K., France, Germany, China and Russia. This three-hour session will videoconference in lawyers from around the world to discuss business and intellectual property hurdles.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.