21 February 2016

HOW LANDLORDS AND TENANTS CAN SEEK JUSTICE FOR COMMERCIAL LEASING DISPUTES

Most jurisdictions have a rental board that deals with residential landlord-tenant disputes. The board has its own rules, its own forms, and its own schedules. It's meant to be accessible without lawyers to both landlords and tenants (though lawyers can certainly be helpful). 

But a vast number of landlord-tenant disputes involve commercial premises. Where do those landlords or tenants go to seek justice? What is a landlord's recourse when a tenant stops paying rent or refuses to leave rented premises after a lease expires? What can a tenant do when a landlord locks him out of premises over which he holds a lease? Who ya gonna call? In Ontario the answer is: the Superior Court of Justice. 

The Superior Court is always the place to go when there's no other place else you're supposed to be going legally speaking. So you don't go there for residential landlord-tenant matters, because there's already an administrative tribunal set up for that. But the only thing regulating commercial leasing is the common law of contract, plus what's known as the Commercial Tenancies Act, R.S.O. c. L.7.

That Act generally applies to all tenancies to which the Residential Tenancies Act, 2006 does not apply. Unfortunately the Commercial Tenancies Act isn't the easiest Act to read. It's got a lot of really old language in it that's never been "modernized," so that you're left with provisions like: "Every person has the like remedy by distress and impounding and selling the property distrained in cases of rents seck as in the case of rent reserved upon the lease." And no, "rents seck" isn't a typo, it comes with the Middle English "rent sek" which in turn comes from the Anglo-French "rente seque" meaning "dry rent." I highly advise you to retain a lawyer to advise you on your rights and obligations under the Act.

The Commercial Tenancies Act contains lots of useful provisions for both commercial landlords and tenants, though it's definitely not a complete code of procedure governing commercial tenancies. The gaps are filled in by the common law of contract. For landlords, there are provisions like s. 58 which provides that a tenant will owe a landlord twice the monthly rent for every month during which he illegally overholds a property beyond the expiry or termination of a lease. For tenants, there are provisions like s-s. 32(2) which permits a sub-tenant to serve a statutory declaration on a landlord who is seeking to seize tenant goods for non-payment of rent confirming that the tenant has no interest in the property of the sub-tenant, and that the sub-tenant's property therefore shouldn't be seized.

Because the Superior Court is a court of "original inherent jurisdiction," you can ask it for any remedy you think to be just. You might also have recourse to the Small Claims Court for money or property disputes under $25,000 in value involving commercial leases, but you can't get orders from that court forcing people to do or not so things - like evicting a tenant - you can only get money or property returned. So Small Claims Court has limited use in commercial lease disputes. 

The key to happy commercial leasing is good legal advice (for both the landlord and the tenant) prior to signing a lease. Such advice can be a real bargain compared to the expense of going to court later to fight over whether or not the terms of the lease have been breached, and what remedies should be granted for that breach. But be assured that the Superior Court of Justice, the common law, and the Commercial Tenancies Act do provide for robust remedies for both landlord and tenants facing commercial leasing injustices. 



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