Toronto Commercial Lease Lawyer
Commercial Real Estate Lease Lawyer Toronto: Protecting Your Business
Commercial leases are fundamentally different from residential tenancies. They are not governed by Ontario’s Residential Tenancies Act, and nearly every term is negotiable. This flexibility cuts both ways: it gives businesses room to customize their lease, but it also means a badly negotiated lease can lock you into unfavourable terms for years. Every clause matters, from the rent escalation formula and operating cost pass-throughs to personal guarantees, repair obligations, and renewal rights.
At Sarkaria Sethi LLP, we help Toronto-area business owners, landlords, and tenants negotiate, review, and draft commercial leases. Whether you are a startup renting your first office, a restaurant owner negotiating a long-term ground lease, or a landlord leasing space in a multi-tenant building, we ensure your commercial lease protects your interests.
Key Commercial Lease Clauses We Review
Rent Structure: Base Rent, Additional Rent, and TMI
Most commercial leases separate base rent from additional rent, which covers the tenant’s proportionate share of property taxes, insurance, and common area maintenance costs (TMI). The details matter enormously. We review how TMI is calculated, whether there are caps or exclusions on pass-through increases, what happens if the building’s operating costs spike, and whether the landlord can add management fees or administrative charges to the TMI calculation.
Personal Guarantees and Security Deposits
Many commercial landlords require a personal guarantee from the business principals, especially for smaller or newer businesses. We review the scope and duration of the guarantee: is it limited or unlimited? Does it survive the lease term or expire after a period of compliant tenancy? Can it be replaced with a larger security deposit or a letter of credit? We also review security deposit terms to ensure the funds are held in interest-bearing trust accounts as required by Ontario law.
Repair and Maintenance Obligations
The division of repair responsibility varies significantly. Some leases put all interior maintenance on the tenant and all structural and exterior maintenance on the landlord. Others require the tenant to maintain everything. We clarify exactly what you are responsible for, including the HVAC system, electrical and plumbing within the premises, windows and doors, and the roof or structural elements.
Use Clause and Exclusivity
The use clause defines what business activities you can conduct on the premises. For retail or restaurant tenants, an exclusivity clause prevents the landlord from leasing other spaces in the same building to direct competitors. We negotiate these provisions to give your business maximum flexibility while protecting your competitive position.
Renewal, Assignment, and Subletting
Your lease should give you the ability to renew on reasonable terms, assign the lease if you sell your business, and sublet space if your needs change. We negotiate option-to-renew provisions with clear notice periods and rent determination formulas, and ensure assignment and subletting clauses do not give the landlord an unreasonable veto over your business decisions.
Frequently Asked Questions
Can a commercial landlord evict me without cause?
Unlike residential tenancies, commercial leases do not provide statutory protection against eviction without cause. Your rights depend entirely on the terms of your lease. This is why having a lawyer review and negotiate your lease before you sign is essential.
What is a gross lease versus a net lease?
In a gross lease, the landlord pays all operating costs from the base rent. In a net lease, the tenant pays a portion of operating costs (typically a share of property taxes, insurance, and maintenance). Most GTA commercial leases are net leases or modified gross leases. We ensure you understand the total occupancy cost under each structure.
How long does a commercial lease negotiation take?
A straightforward lease for a small office or retail space typically takes 2 to 4 weeks from letter of intent to signed lease. Complex leases involving multiple parties, extensive fit-up work, or unique operational requirements can take 8 to 12 weeks or longer.
Get a Free Legal Consultation
Negotiating a commercial lease? Contact Sarkaria Sethi LLP today. Call 905-440-1220 or reach out online. We serve clients in English, Hindi, and Punjabi.
Legal Information, Not Legal Advice. This page provides general information about real estate legal services in Ontario. Every real estate transaction is unique, and you should consult with a qualified real estate lawyer about your specific situation before taking any action.