Why Commercial Rent Reform?
Canadian businesses create thriving main streets – but what happens when the rent goes up by 30% or more? It’s time for a fairer main street economy for both commercial tenants and landlords.
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 has negative impacts on local business.
In 2022 we launched our Commercial Rent Report, highlighting the need for new business tools to ensure both landlords and tenants are able to survive and thrive.
However, without any kind of rules or regulations – commercial rent & leases are a wild west that cost landlords, tenants & Ontario courts time and money.
That’s why we launched Commercialrent.ca.
Most business owners & landlords know the stress that comes with renewing a lease. Reducing the red tape between tenants and landlords is necessary to create the kinds of neighbourhoods we all want to live in.
Avg. % commercial rent increase in GTA from 2021-2022
Number of protections for tenants under the Ontario Commercial Tenancies Act
% 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 and landlords entering into commercial rent contracts. Traditionally there haven’t been ANY types of regulation on commercial leases – but the system is breaking. As profit becomes an increasingly prominent motivator for commercial landlords, local businesses are being priced out of neighbourhoods at an accelerating pace.
Creating and maintaining thriving main streets with locally owned and operated businesses should be a priority – local businesses are proven good job creators. 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 the goals of both business owners and land owners.
The reason that people move to neighbourhoods is often a local coffee shop, flower store, and many other locally owned spaces. An increasing amount of monopolization and land value speculation on commercial property is leading to major power imbalances in Commercial Landlord-Tenant relationships.
Would you go to a casino where the dealer could view everyone’s cards before, during, and after the deal?
Our vision is to set the framework for modern Commercial Tenant-Landlord guidelines. Leveling the playing field will give local businesses and landlords the tools they need to ensure thriving local neighbourhoods.
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. However, the uncertainty of lease renewals and changes to rent prices hinder the capabilities of brick and mortar businesses to plan for the future.
Ontario Commercial Rent Reform
Statistics indicate that more commercial properties are being consolidated into fewer hands – or to land value speculators.
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 recourse for the tenant. Additionally, with 1.5 million new residents expected in Ontario by 2040, language barriers are becoming increasingly common for new Canadians that may not understand the legal language they’re agreeing to.
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. Commercial Rent Reform will be a catalyst to a more efficient and robust economy.
Simplified leases for easier to understand agreements. Less time spent on leasing documents means more time to grow Ontario’s economy.
Commercial Tenant-Landlord Dispute Resolution
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 or similar tool will mean faster and fairer resolutions for both parties – while removing cases from Ontario courts.
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 changes to rent – not jacking up prices because a business becomes popular.