CANADA Law and Practice Contributed by: Rachel V Hutton, Michael L Dyck, Mario Paura and Miguel Manzano, Stikeman Elliott LLP
6.18 Right to Assign a Leasehold Interest Most leases provide that the landlord must first con - sent to any assignment of a lease, any subletting of the leased premises, or any change of corporate control of the tenant. The lease will dictate whether that consent may or may not be unreasonably with - held and will state the conditions for that consent. Most common-law jurisdictions dictate certain cir - cumstances under which the landlord may withhold consent. If a lease in Quebec is silent on the land - lord’s conditions to approve a transfer, the fallback will be the Civil Code of Quebec, which is ordinarily very tenant-friendly. Commercial leases may also give the landlord the right to terminate the lease upon a request for assignment, sublet or change of control, or to otherwise impose conditions on the granting of a consent. 6.19 Right to Terminate a Lease A landlord will typically have the right to terminate a lease upon the tenant’s failure to pay rent, upon anoth - er material breach that is not cured within a specified time, upon the tenant’s insolvency, and upon substan - tial damage or destruction of the leased premises/ building. Tenants typically either have no right to ter - minate a lease or may only do so in limited circum - stances, such as upon damage or destruction of the leased premises. Where a tenant negotiates an early termination right, fees will often be payable, including for example based on the unamortised value of lease - hold improvements paid for by the landlord. 6.20 Registration Requirements In common-law jurisdictions, tenants are typically permitted to register evidence of their lease against title to the subject lands in the relevant land regis - try, although, other than in Quebec, the lease may allow the landlord to prohibit registration. Depend - ing on the jurisdiction, the actual lease agreement, a caveat/notice of lease or a short form of lease can be recorded on title to the subject lands. Upon the registration of a lease, transfer tax may be payable in British Columbia and Ontario. Generally, the tenant is responsible to pay such transfer taxes. In Quebec, a lease with a term that exceeds 40 years, inclusive of renewals, triggers transfer duties.
and maintenance of such work and, upon termina - tion, the lease will dictate whether the work must be removed and the leased premises restored to their original state by the tenant, whether reasonable wear and tear is excepted, and whether improvements will become the property of the landlord. 6.15 Specific Regulations All Canadian provinces and territories have residential tenancy legislation; in Quebec, it is included in the Civil Code. Some provinces and territories also have legislation governing commercial tenancies generally, without specific provisions in respect of any particular category of commercial property. Where legislation does not exist or does not address an issue, common-law principles apply. During the pandemic, rent-subsidy programmes and eviction moratoriums applied to commercial and residential tenancies, respectively. 6.16 Effect of the Tenant’s Insolvency Subject to the specific terms and conditions of a lease, a tenant’s insolvency would likely trigger an event of default under the lease and permit a landlord to terminate the lease; however, bankruptcy legislation would apply to the tenancy relationship. In Alberta, the Landlord’s Rights on Bankruptcy Act contains specific rules as to what may happen with a lease or sublease upon bankruptcy. 6.17 Right to Occupy After Termination or Expiry of a Lease Commercial tenants generally do not have the right to continue to occupy the relevant real estate after the expiry or termination of the lease term. However, leas - es often contain an “overholding” clause whereby a tenant may remain in possession on a monthly basis, usually at increased rent (up to 200% of the monthly rent payable during the term). If a tenant continues in possession after the expiry or termination of the lease term, the landlord may be entitled to obtain a court order for delivery of pos - session.
91 CHAMBERS.COM
Powered by FlippingBook