In Aim Health Group Inc. v. 40 Finchgate Limited Partnership, the Ontario Court of Appeal overturned a recent lower court decision regarding a tenant's rights to overhold on a lease. In this case, the Term of the Lease ended on December 31, 2011, but the Tenant informed the Landlord that it would need more time before it could relocate to other premises. The Landlord informed the Tenant that it needed vacant possession of the premises on December 31, 2011, as it had found a new tenant. On January 1, 2012, the Landlord changed the locks and a few days later removed the Tenant's property from the premises. The trial judge held that the Tenant was a validly overholding tenant on a month-to-month basis.
There was a collective sigh of relief by Canadian landlords when the Court of Appeal reversed the lower court decision and re-affirmed the rights of a landlord to oust an overholding tenant. The Court held that the Tenant could not unilaterally stay in the premises beyond the expiry date without the Landlord's consent. The Court noted that a landlord's consent can be implied if a landlord accepts rent during an overholding period. However, in Aim Health the Landlord clearly stated its intention to re-take possession at the end of the term and had not accepted any rent during the overholding period.
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