CANADA Law and Practice Contributed by: Rachel V Hutton, Michael L Dyck, Mario Paura and Miguel Manzano, Stikeman Elliott LLP
The interpretation of business-interruption insur - ance provisions generally did not result in ten - ants being covered as a result of office closures during the COVID-19 pandemic. 6.13 Restrictions on the Use of Real Estate Landlords may impose restrictions on how a ten - ant uses the real estate, in addition to generally applicable land use, zoning and planning laws. The use of real estate can also be affected by restrictive covenants. 6.14 Tenant’s Ability to Alter and Improve Real Estate The terms and conditions of a lease will deter - mine whether a tenant is permitted to alter or improve leased premises or install tenant trade fixtures. Landlords often restrict work that affects the structure of the leased premises or affects or disturbs other tenants. Tenants will usually be responsible for the repair and maintenance of such work and, upon termination, 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 improve - ments 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 com - mercial tenancies generally, without specific pro - visions 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, bank - ruptcy 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, leases often contain an “over- holding” 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 land - lord may be entitled to obtain a court order for delivery of possession. 6.18 Right to Assign a Leasehold Interest Most leases provide that the landlord must first consent to any assignment of a lease, any sub - letting 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 withheld and will state the conditions for that consent. Most common-law jurisdictions dictate certain circumstances under which the landlord may withhold consent. If a lease in Quebec is silent on the landlord’s condi -
237 CHAMBERS.COM
Powered by FlippingBook