HAVE YOUR LEASE OR RENTAL AGREE…
HAVE YOUR LEASE OR RENTAL AGREEMENT REVIEWED
There is a lot to know about lease renewals. Hillfield Properties can help.
Published on 11th May, 2021 by Hillfield Properties
Many persons may look to assign their lease coming out of the consequences of the pandemic. This means lease renewal negotiations may be on the cards for many landlords and tenants. In this case, you may want to discuss it further with a qualified legal professional or consultant.
The Ontario court recently stated that even if a suitable replacement for a tenant is found, commercial landlords are not bound to accept a lease transfer. Tenants may be bound within the confines of the lease and landlords can choose who they wish to rent their properties to.
The recent case is helpful advice for anyone looking to understand the lease renewal process and the renewal negotiations involved. Of course, the Landlord and Tenant Board encourages negotiations between landlords and tenants. This is where an experienced property legal professional can help.
The test to determine whether or not the lease should have been renewed and assigned is whether or not the landlord’s behaviour was unreasonable under the renewable lease and at law.
RESIDENTIAL V COMMERCIAL LEASES:
If the lease was residential, then the court may have favoured the tenant for renewable agreements. However, when the case involves a commercial property rented by a company, the court stated that landlords are rarely required to accept a new tenant.
For more information on renewal negotiations, it is best to contact a qualified legal professional or firm. This is because the laws continue to change over time. In recent years, landlords have been given more leeway in terms of lease renewals for commercial properties.
FACTORS INVOLVED IN RENEWAL NEGOTIATIONS:
The Landlord and Tenant Board would consider the surrounding circumstances of the lease and building for commercial properties including the market and the impact of assigning a lease to a certain tenant business.
It would also consider the financial position of both parties as well as the new potential tenant. The Board must finally consider reasonableness. The recent decision does not necessarily mean that landlords can simply refuse the renewal agreement without cause or unreasonably.
Unreasonable refusal to consent to a lease renewal is also a serious issue. Landlords should be minded to carefully consider the possible new tenants during the phase of renewal negotiations to avoid liability.
WHAT TO TAKE AWAY:
Landlords and tenants should always be open to renewal negotiations and may wish to involve the services and help of a qualified property law professional. This way, they can understand what is required under the Commercial Tenancies Act or the Residential Tenancies Act.
They can be deemed to be acting reasonably and trying to work which each other during renewal negotiations. After all, the Landlord and Tenant Board requires all parties to be open to negotiations in trying to come to an amicable agreement.