Why Commercial Rent Reform?

Do you want your business to stay in the same location? You might be facing a (totally legal) 30% rent increase from one month to the next.

Businesses Have No Protection From Bad Deals and Unscrupulous Landlords

In Ontario, many Commercial Landlord – Tenant relationships work well.  Main Streets remain well-balanced because landlords understand that raising rent too fast, or treating their customers (aka your favourite local businesses) poorly can have a negative impact on the long-term success of a commercial neighbourhood.

However, business owners have no rights in these relationships. There is also mounting evidence to show that these relationships are becoming increasingly strained as profit becomes the main motive for owning property.  This means that entering into a Lease, or renewing one, can come with serious concessions by the business.

That’s why we launched Commercialrent.ca.

Most business owners know the stress that comes with renewing a lease. That’s why we’re calling for sensible, light-touch regulation that benefits both parties in a Commercial Lease.

Simple tools like Standardized Leases, a Commercial Tenants Board, and Rent Increase Caps will build more resilient businesses and neighbourhoods.  By removing the vast sea of grey area, businesses and landlords will both save time, money, and grief.  Read on to learn more.

 

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Avg. % commercial rent increase in GTA from 2021-2022

Number of protections for tenants under the Ontario Commercial Tenancies Act

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% of businesses that have had to move or close because of a large rent increase

Our mission is simple: create a set of modern guidelines for businesses entering into commercial rent contracts.  Traditionally there haven’t been ANY types of regulation on commercial leases – but the system is starting to break.  As profit becomes an increasingly prominent motivator for commercial landlords, local businesses are being priced out of neighbourhoods at an accelerating pace.

We want to maintain and create more thriving main streets with locally owned and operated businesses.  To do that, we need to ensure they don’t get priced out of the market.  Sensible, light-touch regulation at all 3 levels of government will help achieve a new era of local business success.

 

The reason that people move to neighbourhoods is often a local coffee shop, flower store, and many other locally owned spaces.  We’ve seen an increasing amount of monopolization of commercial property ownership leading to an even greater power imbalance between commercial tenants and landlords – the latter controlling all the cards.  Would you go to a casino where the dealer could view everyone’s cards before, during, and after the deal?

Modern guidelines for Commercial Tenant-Landlord relationships will help level the playing field and give independent businesses a stronger footing in these relationships.  

CommercialRent.ca was launched by the Better Way Alliance – Canada’s Ethical Employer network.  Our members create great local jobs in their communities.  However, the uncertainty of rent increases can have massive impacts on creating better company culture and benefits.  When rent goes up, it means less money to invest in employees.

Most businesses across Ontario and Canada understand the value of investing in employees.  Consistent lease renewals with reasonable and expected changes to rent prices help businesses invest in their people and communities.

 

Ontario Commercial Rent Reform

Why Now?

Statistics indicate that more commercial properties are being consolidated into fewer hands.  

Without any standards or templates for leases for commercial tenants, business owners often don’t know what’s missing until they have to deal with an issue that isn’t addressed in their lease.

That’s when problems arise – there are no clauses that could be enforced and no recourses for the tenant.

While a common argument is that leases are up to the tenant to negotiate with their landlord, the reality is that without standards, tenants don’t know what their lease needs to include. We’re proposing the government specify standards for all commercial lease agreements.

As Ontario’s economy continues to recover from the last few difficult years, ensuring thriving Main Streets is integral so businesses can create good local jobs.

Standardized Leases

Simplified leases for easier to understand agreements.  Less time spent on leasing documents means more time to grow Ontario’s economy.

Commercial Tenants Board

Currently the only conflict-resolution option that Commercial Tenants & Landlords have is Ontario’s backlogged court system. Simplifying this process via a Commercial tenants Board will mean faster and fairer resolutions for both parties.

Reasonable Rent Increase Caps

Currently, Ontario landlords can increase commercial rent by any amount.  In neighbourhoods across Ontario, businesses are shutting down because of 20, 50, or even 100% rent increases. Keeping local businesses thriving on Main Streets depends on fair rent.