In Ontario, if you're leasing a commercial property for a retail store, warehouse, office, or restaurant, then the lease agreement will be the most crucial legal document you will sign. Commercial lease agreements, however, provide fewer legal protections compared to residential leases to tenants, therefore it is necessary that you understand your rights, obligations, and the risks involved thoroughly.

LexCounsel Professional Corporation is our law firm that helps those business owners and entrepreneurs all over Mississauga to decide, check, and sign commercial leases that will be good for them in a long run.

What Is a Commercial Lease?

A commercial lease is a contract between a landlord and a tenant that grants the tenant the use of a particular property to run their business for a specified time and under agreed terms.

Whereas residential leases are typically standardized, commercial leases are however very flexible. This means that each and every provision therein can influence your business activities and financial situation. Hence the need for a legal adviser to go through before you sign.

Key Clauses to Review in a Commercial Lease Agreement

Below are the most important parts that every business owner needs to be familiar with:

1. Rent and Additional Costs

• Base Rent: The simplest average amount that you will have to pay per month.
• TMI (Taxes, Maintenance, Insurance): Usually, this is added on the base rent in the case of “net leases.”
• Increases: Is there an annual step increase that is fixed? Has the rent been made dependent on the changes in inflation or on the state of the market?

2. Lease Term and Renewal Options

• Length of Lease: How long was the contract period?
• Renewal Clause: Was there any option to prolong the lease and, if yes, on what conditions?

3. Use of Premises

• Registering the allowable use of the premises in detail (e.g., retail, office, medical).
• If you are not careful, you may end up with an exclusivity clause or restrictions that prohibit the introduction of new competing businesses in the area.

4. Maintenance and Repairs

• Find out if the responsibility for fixing the problems lies with you or the landlord.
• Is there anything in the lease about capital expenditures such as the HVAC replacement or roof repairs?

5. Improvements and Alterations

• Have you got the possibility to upgrade or install new devices?
• Will these changes remain the landlord’s possession after the end of the lease?

6. Termination and Exit Strategy

• What will occur if the business is shut down or moved to another place?
• Is there a provision in the lease agreement for early termination

Why Legal Review Is Crucial

In most cases, landlords usually draft commercial lease templates, that are generally in their favor. Tenants without legal review, however, run the risk of:

• Covering such maintenance or tax expenses that were not expected
• Being unable to make the decisions regarding their business that they want in the future
• Having to solve the problem of legal disputes due to the lease terms
• Continually being treated unfairly as per the contract

Final Thoughts

Signing a commercial lease is probably the most important legal business a business can make. Get it checked out thoroughly before you sign. Ensure the safety of your business by relying on professional commercial lawyers.

📞 Reach out to LexCounsel at +1 (905) 671‑2666