Everything You Need to Know About Commercial Tenancies
The responsibilities of both tenants and landlords.
2.7 min read
Are you a new business owner and are looking to take your business to the next level? Then renting a commercial property may be the right choice for you. However, there are many factors to consider before signing on the dotted line.
We’re sharing everything you need to know about commercial tenancies and the responsibilities of both tenants and landlords that go along with them.
Commercial Tenancies Act (CTA)
Ontario’s Commercial Tenancies Act (CTA) outlines the relationship, rights and obligations between commercial landlords and tenants. However, a signed commercial lease agreement with your landlord or tenant may take precedence over the CTA in some cases. It is important to note that the provincial government typically does not get involved in commercial disputes.
Commercial Lease Agreements
Your commercial lease agreement acts as a binding contract between you and your landlord. The agreement outlines the rights and responsibilities of both parties and is often altered to meet the unique needs of the tenant and landlord. Although not one commercial lease agreement is the same, there are various factors that the agreement should cover, including;
The rent amount, including rules for rent increases and notice requirements
The deposit amount
Insurance requirements
Repair and maintenance obligations
Rules about how to renew or end the lease
The length and type of tenancy (month-to-month or fixed-term)
Other business details that have been negotiated between the landlord and the tenant
When considering renting a commercial property for your business, it is vital to ensure that the space will fulfill your needs now and well into the future.
Rent Increases
Rent increases are not covered under the Commercial Tenancies Act, meaning that there is no cap on how much landlords can increase your rent. However, most accommodating landlords will take your business and the market into consideration when looking at rent prices. Ensure that potential yearly rent increases are outlined in your rental agreement.
Knowing what type of lease agreement is on the table and the critical negotiables of your contract will give you the upper hand, helping you protect your business needs.
Reference
Renting commercial property in Ontario. ontario.ca. (n.d.). Retrieved May 10, 2022, from https://www.ontario.ca/page/renting-commercial-property-ontario
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