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What You Need to Know About Breaking Your Commercial Lease
Disclaimer: This article on breaking your commercial lease is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Perhaps you are a business owner who has outgrown your current space. Or you are a landlord who has reached your limit with a difficult tenant. Regardless, one thing is clear: you need to break that commercial lease.
This article will explore the process and what you should consider before breaking your lease. We will discuss this question from the perspective of both tenants and landlords.
(Negotiating your commercial lease? Feel free to read this article on what you need to know.)
The Significance of Commercial Leases
Commercial leases are legally binding agreements. They outline the terms and conditions governing the use of commercial properties. These leases play a crucial role, defining the rights and obligations of the tenant and the landlord.
Lease agreements can be complex and specific to each situation. As such, the process of breaking a commercial lease may vary. The terms of your lease will dictate what you can do next. Below, we’ll explore some common strategies for both tenants and landlords:
Breaking a Commercial Lease as a Tenant
Breaking a commercial lease in Ontario as a tenant requires careful thought. You must adhere to the terms of your lease and to legal procedures. Here are several strategies tenants can consider:
Give Your Landlord Notice
When ending a lease that has a specific term, you can give your landlord notice. For monthly leases, one month’s written notice is typically required.
Landlord Breach of Lease
If your landlord does not follow the terms of the lease, you may have grounds for ending it. This can occur if the landlord impacts your business by altering access to the property. In such cases, you can consider the lease terminated and sue the landlord for damages.
Sublease Agreement
Under certain situations and with landlord consent, you can sublease all or part of the rented property. This allows you to pass on the use of the property to another subtenant. Keep in mind that you remain financially responsible for the original lease.
Assignment Agreement
Similar to subleasing, you can assign your lease to a new tenant. This means the new tenant takes over your tenancy and the terms of the lease. The landlord must agree to this arrangement.
Breaking a Commercial Lease as a Landlord
Landlords can also face situations where they may think they need to break a commercial lease. However, they do have other options.
Distraint:
Distraint is seizing someone’s assets to be paid for money owed. Landlords may be able to use this remedy to deal with outstanding rent. In that instance, they would enter the premises and seize goods with a value up to the amount of outstanding rent.
Damages:
Landlords can sue tenants for monetary damages resulting from breaches of the lease terms. For example, if a tenant causes significant damage to the property beyond normal wear and tear, the landlord can seek compensation for repair costs
Injunction:
Seeking an injunction can stop a tenant from engaging in activities prohibited by the lease. For example, if a lease explicitly forbids using the rented space for specific activities, such as operating a noisy nightclub in a residential area, and the tenant violates these terms, the landlord can seek an injunction.
Specific Performance:
Landlords can seek an order of specific performance to force a tenant to fulfill lease obligations.
However, sometimes a landlord’s only option is to terminate the lease. Here are some common remedies that are available.
Forfeiture:
Landlords can terminate the lease by providing written notice to the tenant and preventing them from entering the premises.
Writ of Possession:
In some cases, physically excluding the tenant is impractical. In those cases, landlords can obtain a writ of possession to take possession of the property on their behalf.
Seek Professional Assistance to Break Your Commercial Lease
Whether you’re a tenant or a landlord, breaking a commercial lease in Ontario is no simple matter. It’s essential to consult an experienced business lawyer to ensure as smooth a process as possible.
If you find yourself in such a situation, don’t hesitate to reach out to legal experts like Beeksma Law. Our team of experienced lawyers has the expertise to guide you through the process and protect your interests. Book your complimentary consultation today!
Rural Real Estate: Do You Need a Shared Well Agreement?
Disclaimer: This article on whether you need a shared well agreement is intended for the purpose of providing information only. It is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Rural real estate has its own unique challenges. Many lenders require specific documents before approving a mortgage, such as a survey of the property and a septic tank inspection.
One of those complexities is the existence of shared wells.
Your rural property may have water provided by a well instead of the municipal water supply. You may even have a shared well, meaning that the well on one property provides water to neighbouring properties.
This article will discuss how this affects your purchase and how to protect your interests.
Buying a home with a shared well
If you are considering buying a home with a shared well, you should consider several factors. Firstly, it’s crucial to determine if there is a shared well agreement in place.
If there is no shared well agreement in place
In some cases, a shared well agreement may not exist, which can create problems down the line. Without an agreement, there may be confusion about who is responsible for maintenance and repairs, or disagreements about water usage. It’s important to ensure that a shared well agreement is in place before finalizing your purchase.
If the other parties refuse to sign an agreement or you cannot agree on the terms, it may be necessary to explore other options.
What if there is a shared well agreement in place?
If there is, you will need to obtain a copy of the shared well agreement. Review it carefully with a lawyer to ensure that you understand your rights and responsibilities. The agreement should outline who is responsible for maintenance and repairs, how the parties will split costs, and any limitations on water usage.
Secondly, it’s important to assess the condition of the shared well and the water quality. If the well or water quality is in poor condition, you may need to negotiate repairs or upgrades with the other parties.
It is essential to consider the potential risks associated with a shared well. When multiple parties use the same water distribution system, there is a risk of contamination or overuse.
It’s also important to note that shared well agreements can limit your ability to expand or modify your property. For example, consider how the agreement will handle a situation if one of the properties serviced by the will wants to install and fill a swimming pool, you may need to get permission from the other property owners who use the well. The agreement may also limit your ability to drill a new well or expand the existing one.
Title Restrictions for Shared Well Agreements
Access to a neighbouring property – such as a shared driveway – is typically formalized by registering an easement on title and having an easement agreement.
Currently, there are no provisions to register a shared well agreement on title. However, we still strongly encourage you to have such an agreement prepared. The agreement would then be kept and would pass on from owner to owner.
Make Your Next Real Estate Transaction A Success With Beeskma Law
Beeksma Law is a trusted and experienced law firm that has helped many families. Our team of experienced legal professionals can provide you with expert legal advice and guidance throughout the buying process. We will help you make informed decisions and protect your rights.
Contact our offices today to discuss your transaction.
Do you understand your commercial lease agreement?
Disclaimer: This article on commercial lease agreement in Ontario is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Our office has been receiving more and more inquiries recently relating to commercial leasing disputes. This is to be expected to some extent – after all, we are in a recession – and we want to make sure that all of our clients are aware of their rights and responsibilities when it comes to their leases.
Of course, every situation and lease is unique. If you would like to discuss your lease, please get in touch with our office as soon as possible. We are well-versed in commercial tenant law, and we can provide you with advice and guidance on how to proceed.
Your Commerical Lease Agreement in Ontario
Many landlords reach out to us because they are having significant difficulties with their tenants, such as their tenants defaulting on rent or not following the terms of their lease. What are your options?
Well, what does your lease say? Generally speaking, your lease is going to be your ground zero. If you have a well-prepared lease, you have more options. On the other hand, if you do not have a strongly worded, clear, and enforceable lease, you have fewer options.
The reality is that there are not a lot of protections under common law or in the legislation, specifically the Commercial Tenancies Act. Your lease is your best form of protection. We cannot overstate it enough: if you are not sure if your lease will protect you from a difficult tenant, you do not want to wait until there is an issue to find out.
Most savvy commercial landlords have an exceedingly good lease that gives them all the rights and “hold the cards,” so to speak. So what does that mean for tenants?
Signing a commercial lease as a tenant
You may be so excited to find the perfect space for your growing business that you are ready to sign anything. However, you need to ensure that the terms of the lease protect you and your business as much as possible.
You have rights as a tenant, but if you sign away those rights when you sign your lease, then you cannot avail yourself of the remedies provided for in the Commercial Tenancies Act. You must understand what you are signing and the lease must be able to also serve your interests.
That is where we come in. Before you sign your rights away, talk to our team. Too often, we see great businesses with their hands tied by a landlord-provided lease, and we do not want that for you. We can help you understand what the terms really mean and negotiate the terms that will hold your business back.
Protecting your interests with Beeksma Law
At Beeksma Law, our comprehensive experience covers both sides of the table. For landlords, we can help with drafting and enforcing your leases. For tenants, our experience helps to ensure that your rights are protected while you sign a lease.
We believe in empowering our clients. When you are armed with knowledge, you can make informed decisions that are in the best interests of your business. We clearly explain the law and ensure you understand what is at stake before signing on the dotted line. Book a call with our team today – we are happy to hear from you!
The Biggest Commercial Lease Mistakes You Need to Avoid
Disclaimer: This article on Commercial Lease Mistakes is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Your business is growing and it’s time to move out of your garage, home office, or dining room table. It’s time to find that special place that will help you take your business to the next level. Congratulations!
However, more is involved that finding a realtor and thinking about square footage. No, you need to make sure that your commercial lease serves you well and protects your interests. (For a high-level view of what your commercial lease may include, check out this previous article)
In this article, we will talk about the dangers of signing a bad commercial lease, as well as specific mistakes that you can avoid.
The Cost of Signing a “Bad” Commercial Lease
Commercial leases can be complex, and if you’re not careful, you could end up signing a bad one. A bad commercial lease can cost you thousands of dollars in rent, repairs, and other expenses. It can also tie you to a property that’s not suitable for your business.
One of our clients recently found herself in that very situation. Not only was she faced with the prospect of having committed to a property that she could not use for her business, but she was still obligated to pay rent on it!
We want to help you avoid making the same mistakes our client did. That is why we’ve put together a list of the biggest commercial lease mistakes to avoid.
Mistake #1 – Failing to Negotiate Your Commercial Lease
One of the biggest mistakes that tenants can make is simply failing to negotiate their lease terms. Remember, once you enter into a lease agreement, there is simply not a whole lot that can be done to change the terms – so it’s important to get everything in writing upfront.
Mistake #2 – Assuming that “Standard Terms” are Fair
In many instances, “standard terms” tend to favor landlords more so than tenants. As such, it’s important to have a lawyer or experienced commercial leasing agent review your lease agreement before putting pen to paper.
Mistake #3 – Not Understanding Your Commercial Lease
It is important to clearly understand any agreement that you sign. However, this is especially true when it comes to a commercial lease. If there is anything in the lease that you do not understand, be sure to ask questions and get clarification before signing.
Be sure to carefully review the language regarding operating expenses in your lease agreement. In some cases, tenants may be responsible for a portion of these costs. That is why it’s important to clearly understand what you will and will not be responsible for.
Mistake #4 – Rushing into a Decision
When signing a commercial lease, it’s important to take your time and carefully consider all your options. Once you sign a lease, you will be legally obligated to uphold your end of the agreement. So, be sure that you are fully committed before putting pen to paper.
Mistake #5 – Not Talking to a Real Estate Lawyer
You may feel like it is an unnecessary expense. However, it always a good idea to have a real estate lawyer review your commercial lease agreement before signing. They will be able to identify any potential red flags and help you negotiate more favorable terms.
Of course, you don’t want just any real estate lawyer. You want an experienced commercial lease lawyer who knows the ins and outs of commercial leasing. You want a team with litigation experience writing your contracts. That experience means they have seen how things can go wrong and how to help you avoid those same traps.
In short, you want a real estate law team like the one at Beeksma Law.
Are you in the process of negotiating a commercial lease? Do you have any questions about your rights as a tenant? If so, reach out to our team of experienced real estate lawyers today. We would be more than happy to help you navigate the leasing process. Our team is here to ensure that you are getting the best possible deal.
3 Questions to Ask Before Co-Owning a Home
Disclaimer: This article on Co-Owning a Home is intended for the purposes of providing information only and is to be used only for the purposes of guidance. This article is not intended to be relied upon as the giving of legal advice and does not purport to be exhaustive.
Whether it is to buy an investment property, due to changing life circumstances, such as a divorce, or because of raising interest rates, more and more people are opting to co-own a home with another party. In fact, we recently learned that there are mixers and apps to match potential co-owners together!
While you may be considering the benefits of sharing costs, the reality is that this is not a decision that should be made lightly.
Just as you wouldn’t purchase a home without considering whether it was the right house for you, you don’t want to purchase a home with someone without asking key questions first. In fact, we strongly recommend that anyone co-owning a home should enter into a co-ownership agreement that will set out the rights and responsibilities of the owners.
For clarity, when we talk about co-owning a home, it applies to owning a property with anyone (including children, parents, siblings, etc.) who is not your spouse. Any property owned with your spouse is covered under the Family Law Act.
This article will highlight three questions to ask before buying a home with someone else. Of course, your situation and interests are unique to you. It is always best to talk about these issues with a lawyer who can help you protect your interests and be proactive about any issues that may come up.
Question #1: How will we structure the ownership?
There are two ways that individuals can co-own a property: as tenants in common or as joint tenants.
Tenants in common means that each owner owns a defined percentage of the property. This ownership can be equal (50/50) or unequal. For example, you may own 60% and your co-owner owns 40%. You can sell, borrow against, or will your undivided interest at any time (subject to the terms of any co-ownership agreements.
A joint tenant relationship means that each owner owns an equal interest in the property. If one joint tenant dies, their ownership interest will automatically transfer to the surviving joint tenant(s). There are four criteria that must all exist in order to be considered a joint tenant:
- All joint tenants must acquire ownership interests at the same time;
- All joint tenants must acquire title by the same deed or will;
- All joint tenants must hold an equal and undivided interest in the property (for example, 50/50); and
- All joint tenants must hold an equal right to possession of the property
If any of these criteria are not met, then the joint tenants will be considered tenants in common.
Question #2: Who will be responsible?
It is important to determine who will be responsible for what when co-owning a home. This includes things like:
- Making the mortgage payments;
- Paying the property taxes;
- Paying for repairs and maintenance; and,
- Carrying insurance on the property.
Who is responsible for making sure that the house remains in good repair and is well-kept? It is important to have an agreement that sets out each owner’s expectations and responsibilities.
Question #3: What happens if…
When purchasing property with your relatives or friends, it is hard to imagine anything going wrong. Unfortunately, things can change and it is important to plan for all eventualities.
This is where you’re going to want to use your imagination and think of many possible scenarios. For example, what would happen if an owner:
- wants to sell the property;
- wishes to make improvements or changes;
- tries to borrow money against their interest in the property; or
- passes away?
What would happen if one or more of the owners could not agree or resolve a dispute?
A good real estate lawyer will be able to help you plan for these potential scenarios by including terms in your co-ownership agreement. For example, the agreement could state that if one owner wants to sell the property, the other owners will have the first right of refusal. Or, if an owner wants to borrow money against their interest, they may need to get the consent of the other owners first.
It is much easier (and cheaper) to plan for these issues when everyone is on the same page at the beginning rather than try to deal with them after they arise.
It’s not too late!
What if you already co-own a property? You may still be able to put a co-ownership agreement in place. This is something that you should discuss with a lawyer to ensure that all of your interests are protected.
An ounce of prevention is worth a pound of cure!
We have represented many individuals who now find themselves dealing with time-consuming and expensive real estate litigation. Each of them was convinced that they did not need to put anything in writing – that it would never happen to them.
Don’t let this happen to you! Be proactive and have a real estate lawyer help you plan for all contingencies by drafting a comprehensive co-ownership agreement.
At Beeksma Law, our real estate litigation experience helps us identify potential issues and conflicts that may arise. We then work with you to negotiate strong contracts that will protect your interests and give you peace of mind.
If you are thinking about co-owning a property with your friends or relatives, please contact us to discuss your options. We would be happy to help!