Commercial Rent FAQ: What Are my Rights as Commercial Tenant in Ontario?
How much can my commercial rent go up in Ontario?
Whether or not you have a lease with your landlord, at the end of the term (or month) there is no limit to potential rent increases from term to term. We commonly hear of 10, 20, even 50% rent increases from one lease to the next.
While it is possible to negotiate rent caps into your lease, it is fairly rare. Huge rent increases are increasingly common. Between 2021-2023, the average price of commercial rent went up almost 20% in the GTA.
Are there any dispute resolution tools aside from suing my landlord in Ontario?
Your only way to resolve a commercial landlord dispute in Ontario is taking them to court. Whether it’s a leaky sewage pipe or finding out you’ve overpaid taxes, the only resolution is suing your landlord.
That’s why the BWA is proposing formal dispute resolution tools. A Commercial Tenants Board to remove these disputes from Ontario’s back-logged courts would be a valuable addition – this would reduce red-tape between businesses & landlords while reducing legal costs for both parties.
Does Ontario have Standardized Leases for Commercial Tenants?
No.
In Ontario there is no template or standard lease document. This means that every Landlord will have a unique lease for you to negotiate. If you’re signing or re-signing a Commercial Lease, you may have to spend thousands of dollars on lawyers to navigate documents that are dozens of pages long.
Even after spending this money, there’s no guarantee that a Commercial Landlord will accept any lease amendments.
Standardized Leases help by creating easier to understand documents. These can be signed in days or a couple of weeks instead of the usual 2-3 months it takes to sign a Commercial Lease in Ontario. Additionally, for new Canadians, they can help reduce any technical language barriers and get them starting a business faster.
How Much Can My Landlord Increase Commercial Rent in Ontario?
There are no limits to Commercial Rent Increases in Ontario.
Many Landlords understand that a 10, 30 or 50% increase isn’t good for their tenants business (or their own!).
However, without a rent increase cap, some will use it as an opportunity to charge established businesses exorbitant increases during lease renewals. We’ve all heard stories of a restaurant becoming popular and then shutting down a couple years later because the landlord wanted a 100% rent raise.
This has caused many businesses to leave beloved neighbourhoods after decades – or simply close their doors forever. Creating thriving neighbourhoods starts with making sure businesses can be consistent in their operation – major rent increases are the biggest disruptor to otherwise successful main street enterprises.
Do Commercial Landlords Need to Offer a Lease in Ontario?
Commercial Landlords do not need to offer a lease in Ontario. Often this is used as a way to drive a tenant out of a space over time.
If a tenant’s lease ends and a new agreement isn’t offered, the landlord can simply increase a tenant’s rent every month until they can’t bear it any longer.
What Rights Do I Have as a Commercial Tenant?
Developing a reasonable legislative framework and updating the Ontario Tenancies Act will benefit both Landlords and Tenants. Creating standardized leases, a Commercial Tenants Board, and Commercial Rent Caps will streamline the Commercial Leasing process and create more resilient Main Street Businesses.
As a Tenant, do I have to pay rent if my landlord owes me money?
Strangely, yes. If your landlord owes you money, you cannot withhold rent until the money owed to you is paid.
We are proposing legislation in Ontario to change this. Read about it here and see how Tenant-Landlord offsets could help level the commercial lease playing field.
Why are Commercial Tenant Rights Important for Ontario Businesses?
Commercial Rent is a top expense for most businesses. Leases don’t always address repair timelines, and if they do, these repairs aren’t always enforceable without legal action. Even with a commercial lease, it’s legal for a landlord to increase rent by any amount at the end of a term.
We recognize many commercial landlords are small business owners who understand that small & predictable rent increases are the best way to protect their own future income. But not every Landlord has received that memo.
That’s why we launched CommercialRent.ca and this Commercial Rent FAQ. We are a group of Canadian businesses that believe sensible, light-touch, Commercial Rent regulation will help create good local jobs and circulate money back into our communities.
Do you agree? Sign our letter and join our campaign.
If we don’t protect our business’ ability to operate through Commercial Rent Reform, how can we expect businesses to protect our employees?