commercialrent.ca
Commercial Rent Horror Stories:
businesses talk about their rent
What happens when your lease agreement goes wrong? We’ve spoken with dozens of businesses across Canada about their commercial landlord-tenant relationships – and how setting simple standards would help alleviate many of these issues for both parties. Below we tell some of their stories – click the buttons below to explore a specific topic or scroll down.
We’ve interviewed dozens of Canadian business owners who have all experienced a rent increase, dispute, or lease issues. These stories show the impact that lack of protections have on commercial renters. There is a clear need to level the playing field and make sure that commercial leases uphold a spirit of fairness and collaboration. Keep reading to dive into their stories.
If you’re a business being affected by a rent increase, lease issue or landlord trouble read our FAQ here.
Commercial Rent: Business Stories about Commercial Rent Increases
Renting a commercial space is often the largest monetary contract brick and mortar businesses make. Yet there are no protections or standard agreements when entering into a commercial lease. At the end of a commercial lease term, the landlord can raise the rent by any amount – even if the business has invested hundreds of thousands of dollars into the space.
40% Rent Increase
People’s pint brewery
One of Toronto’s fastest rising beer stars was People’s Pint Brewery. An organization with a focus on people (clearly) and quality brews.
After 5 years of operation in Toronto’s Junction neighbourhood, they experienced a 40% rent increase that they couldn’t sustain.
The landlord has since tried to rent the space to a commercial brewer who deemed the space ‘too expensive’.
312% Rent Increase
East India Company LTD.
Since the early 1980’s, East India Company Ltd. imported the finest spices, rice and other cooking ingredients to their space at Cawthra Road.
In 2022, the whole city block was sold to the La Salle Investment Management who jacked up the rent by 312%.
After 40+ years in the location, East India hesitated to give up their iconic retail store. They tried to make it work. Unfortunately this led to layoffs instead of new hires – as of May 2023, they closed their retail store.
While the company has since relocated their wholesale operation to North Mississauga, lifelong retail customers have been left scrambling as East India goes through the monumental task of moving a 50 year old business.
The business survives thanks to the persistence of East India’s second generation Ravi & Sapna Jain who are reinventing the business their parents created as Canadian immigrants.
80% Rent Increase
Marino’s restaurant
In April 2022, Marino’s Restaurant was given a choice: pay an 80% rent increase or move.
After being in the same space for 29 years, the Tsergas family shut down their iconic local restaurant, taking 6 long-time jobs out of the economy.
Their landlord, Peter Stavros, gave the Tsergas family 2 weeks to move their equipment and memories. After 29 years of successful operation, the business still remains closed. As of June 2023, their restaurant space is still vacant.
30% Rent Increase
Coal miner’s daughter
Popularity can be a double-edged sword. Especially in the world of lease renewals. Coal Miner’s Daughter is a successful and popular high-end thrift store with two locations in Toronto.
In early 2023 they attempted to renegotiate their lease but were unable to settle on a fair price. Thankfully they’ve since moved to a new space.
Commercial Rent: Business Stories about Lack of Dispute Resolution
Owed Money by Landlord
NU Grocery
Valerie Leloup of NU Grocery has had a lot of ups and downs during the COVID-19 Pandemic.
What’s concerning Valerie? Commercial Rent. Many businesses have spoken about the unpredictability of Commercial Landlord / Tenant relationships.
For Valerie, the story was a bit different – her Landlord owed her almost $25,000 but refused to pay.
Even though her Landlord owed HER, if Nu Grocery decided to stop rent payments to balance out the debt, the business could still be evicted.
This led to a years-long court case that Valerie won – but it took time, emotional energy and legal costs reduced the amount owed by a fair amount.
An out-of-court dispute resolution would have saved both the Landlord and Tenant time, money, and stress.
30% Rent Increase + Repair Issues
The S.P.A.C.E. Dance Studio
In May 2022, S.P.A.C.E. Dance Studio reached out to us and told us their story. After decades in the same space, their landlord had given the building to their children – who promptly raised the rent by over 30%.
On top of this, the studio had experienced a persistent sewage leak – rendering the basement unusable and stinking up the whole joint.
The only recourse that owner Linette Doherty had was to sue the landlords – at great cost and time. Without access to legal funds, she was simply left in limbo. Thankfully, she was able to find another location down the road – but her story highlights the need for out-of-court dispute resolution for commercial tenants and landlords.
Commercial Rent: Business Stories about Unfair Leasing Practices
Triple Net Lease
Footprints on Muskoka
A Triple Net Lease (NNN lease, or TNL for short) is a type of commercial lease agreement where the tenant (that’s you) takes on more financial responsibilities than just paying rent. In this scenario, you also have to cover three “nets,” which are:
- Insurance
- Property Tax
- Maintenance
If you’re curious – there are Single and Double Net Leases, too. In a Single Net Lease (N lease), the tenant pays rent plus property taxes. In a Double Net Lease (NN lease), they pay rent, plus property taxes, plus insurance.
Triple Net Leases are typically long-term commitments, usually lasting 10 to 15 years generally reserved for operations like fast-food restaurants.
Krista Mansour, owner of Footprints on Muskoka, a retail shop that sells comfy and stylish cottage and lakeside apparel, was in her space for 5 years. Her first agreement was for a set rent amount plus utilities.
When it was time to renew, the landlord gave her a new Triple Net Lease agreement. It would make Footprints on Muskoka responsible for rent, utilities and common expenses for the building like building property tax, building insurance, maintenance fees – and complete responsibilities for any problems in the unit, late fees on property taxes, and health insurance for the property manager.
Krista was unwilling to sign this lease, she would have 60 days notice to vacate the property.
Rent Dispute Causes Community Chaos
Till’ Death BBQ
Joy and Shannon Warner launched Till Death BBQ in Fort Irwin, Ontario, turning their wedding catering experience in 2017 into a successful local catering and restaurant business. The restaurant quickly became known for its community spirit, evidenced by walls decorated with customer signatures and a growth chart for kids.
However, their journey hit a roadblock in 2021. Just two years into their venture, the Warners faced an unexpected challenge when their landlord implemented a significant rent increase via Schedule A in their lease. Instead of waiting until the end of the term, their landlord jacked up prices on the business.
This issue was compounded by the landlord’s installation of an illegal septic system, leading to protracted rent negotiations. The situation caused a community backlash, with many locals canceling contracts in support of the BBQ joint.
Despite the obstacles, including a demanding two-hour commute, the Warners’ commitment to their business and community didn’t falter. They even chose to live across the street to stay connected to their work and neighborhood. Their story is a reminder that commercial leases are not designed to be understood by business owners.
Plain language and fair practices from landlords are needed to ensure communities stay strong through both economic and friendship bonds.