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A lease review takes days. Living with a lease you did not understand takes years. We read the document line by line and tell you what it will actually cost you.
Arrange a Call →Commercial leases are enforced as written. Ontario courts will not rewrite a bargain because one party did not read it, which makes the review the cheapest risk management a business tenant will ever buy.
Yes, and ideally before the offer to lease is submitted. Commercial leases are enforced as written, with no Residential Tenancies Act protection and no Landlord and Tenant Board. A review identifies additional rent exposure, repair and restoration obligations, guarantee terms, assignment restrictions and landlord termination rights before you are bound. Most reviews are completed within two to four business days.
Tell us briefly what is going on. A lawyer reviews every enquiry and replies within 24 hours on business days.
A lawyer replies within 24 hours on business days. Urgent? Call +1 416 333 6200, answered 24/7. Submitting this form does not create a solicitor-client relationship.
A commercial lease review is a discrete engagement: you send us the offer to lease or the proposed lease, we read every page including the schedules and the rules and regulations, and you receive a written report in plain language identifying what the document does, what it will cost you beyond the quoted rent, which provisions create real risk, and which of those are worth negotiating. Where you want us to take it further, we prepare a markup and negotiate directly with the landlord's counsel.
The reason a review matters is that commercial leases are enforced as written. There is no Residential Tenancies Act protection, no Landlord and Tenant Board, no statutory cooling-off period and no implied fairness standard. Ontario courts approach commercial leases as bargains between businesses. If the lease says the landlord may recover the cost of replacing the parking lot from you in a single year, or terminate on six months' notice to redevelop, that is the deal you made.
Reviews are most valuable at three moments: before an offer to lease is submitted, before a formal lease is executed, and before a renewal option is exercised. The offer stage is by far the most valuable, because an accepted offer to lease is normally a binding contract that commits the tenant to sign the landlord's standard form, after which the leverage to change that form is largely gone. Landlords and their brokers move quickly and irrevocable dates are often short, so the sooner the document reaches us, the more we can do with it.
Commercial leases vary enormously in length, but the risk concentrates in a predictable set of provisions. The following are the twelve we work through on every file, in the order in which they most often cause problems.
| Clause | What goes wrong |
|---|---|
| Additional rent definition | Capital replacements, structural repairs and the landlord’s own costs recovered from the tenant with no exclusions and no cap |
| Administration and management fees | A percentage charged on the whole cost pool, including realty taxes and utilities, and sometimes on top of a management fee |
| Gross-up | Applied to fixed as well as variable costs, so the tenant subsidises vacancy twice |
| Permitted use and exclusivity | Use drafted so narrowly the business cannot evolve; no exclusivity, so a direct competitor opens two doors down |
| Repair and maintenance | Tenant responsible for HVAC replacement, structural elements or the roof, in an older building this is a six-figure exposure |
| Restoration at end of term | Obligation to remove all improvements and return the premises to base building condition, discovered only at expiry |
| Assignment and subletting | Consent in the landlord’s sole discretion, or a recapture right that lets the landlord take the space instead of consenting. This can block the sale of your business |
| Guarantee or indemnity | Unlimited in amount and duration, extending automatically through every renewal term |
| Landlord termination rights | Demolition, redevelopment, relocation or sale clauses with short notice and no compensation |
| Default and cure periods | Very short cure periods, acceleration of the entire balance of the term, and interest at a punitive rate |
| Renewal option | Vague rent-setting formula (“market rent as determined by the landlord”), a narrow exercise window, or conditional on no prior default of any kind |
| Measurement and rentable area | No stated measurement standard, no certification, and a landlord right to remeasure and adjust rent mid-term |
Beyond the twelve, we look at insurance and indemnity allocation, the waiver of subrogation, whether the lease requires the tenant to insure the landlord's property, the rules and regulations schedule (which the landlord can usually amend unilaterally), signage and after-hours HVAC charges, parking allocation, holdover rates, estoppel certificate obligations, and whether the lease permits registration of a notice of lease to protect the tenancy against a future purchaser or mortgagee.
The offer to lease or lease, all schedules, the rules and regulations, any site or floor plan, and any correspondence about what was agreed verbally. Tell us your irrevocable or signing deadline at the outset.
A short conversation about the business: how long you need the space, what you will spend on improvements, whether you may sell the business during the term, and what you were told the additional rent would be.
A clause-by-clause report separating issues into three tiers: do not sign without changing, negotiate if you can, and accept as ordinary market risk. Written for a business owner, not for another lawyer.
A redline of the lease implementing the tier one and tier two changes, with a covering note to the landlord’s solicitor explaining the commercial rationale for each, which materially improves the acceptance rate.
We deal with the landlord’s counsel, resolve the open points, confirm the final document reflects what was agreed, and advise on execution, corporate signing authority and any guarantee.
Most reviews are completed within two to four business days of receiving the complete document set. Where an irrevocable date is imminent we can usually prioritise the file, but a landlord's deadline is itself often negotiable, a short extension to obtain legal advice is a reasonable request and is rarely refused by a landlord who genuinely wants the deal.
The definition of operating costs, the measurement standard, the rules and regulations, and the landlord’s work versus tenant’s work split are almost always in schedules. A review of the body of the lease without the schedules misses most of the money.
A review that simply lists everything unfavourable in a landlord's form is not useful, because every landlord's form is unfavourable. That is what it is for. What a tenant needs to know is which provisions to spend negotiating capital on. Our reports sort the findings into three tiers. Tier one is do not sign without changing: unlimited personal guarantees running through renewals, restoration obligations that could exceed the value of the fit-out, landlord termination rights with no compensation, and assignment provisions that would prevent a sale of the business.
Tier two is negotiate if you can: exclusions from operating costs, a cap on controllable cost increases, amortisation of capital items, a defined market rent mechanism for renewals with arbitration if the parties cannot agree, a certified rentable area, and audit rights over the annual reconciliation. Tier three is ordinary market risk: provisions that are standard, that a landlord is unlikely to move on, and that do not create disproportionate exposure. Knowing which tier a clause falls into is the difference between a productive negotiation and one that stalls over the wrong points.
We also quantify where we can. A restoration obligation is not just a legal risk, it is a number that belongs in your budget. An uncapped operating cost recovery on a fifteen-year-old building with an aging roof and rooftop units is a foreseeable cost, not a theoretical one. Where a clause creates a contingent liability, the report says roughly what it could cost and when it is likely to be triggered, so the decision to accept it is made with the number in front of you.
Landlord forms in the Toronto market have converged on certain positions, and knowing which ones are genuinely standard saves time. Net leases with full recovery of realty taxes, insurance, utilities and operating costs are standard. An administration or management fee is standard, but its size and the base it is calculated on are negotiable. Personal indemnities from the principals of a small corporate tenant are standard, but their duration and amount are negotiable. Requiring the tenant to insure and to name the landlord as an additional insured is standard; requiring the tenant to insure the landlord's own building is not.
Several provisions that landlords once resisted are now regularly conceded to tenants of reasonable size: exclusion of structural and capital costs from operating costs or their amortisation over useful life, a cap on annual increases in controllable operating costs, a right to audit the year-end reconciliation within a defined window, a carve-out permitting assignment to an affiliate or to a purchaser of the business meeting financial criteria, and a burn-off on the indemnity after a period of default-free occupancy. Whether they are conceded depends on the size of the deal and the state of the market for that asset class.
Two things have not changed. First, section 50 of the Planning Act still treats a lease of part of a parcel for twenty-one years or more, counting renewal rights, as requiring consent, and a lease granted without it can be void. Second, a lease whose term including renewals can exceed fifty years is a conveyance for land transfer tax purposes under the Land Transfer Tax Act. Long-term leases have to be tested against both thresholds regardless of what the commercial terms look like.
Renewal is the moment tenants most often accept documents without review, on the assumption that nothing much has changed. Landlord renewal agreements frequently do more than extend the term: they can incorporate the landlord's current standard form in place of the original lease, revive or extend a guarantee that was about to expire, remove a cap on operating cost increases, delete a further renewal right, or change the restoration obligation. A renewal agreement should be read against the original lease, not on its own.
Estoppel certificates deserve the same care. When a landlord sells or refinances, tenants are asked to certify the commencement and expiry dates, the current rent, the deposits held, that there are no defaults and that there are no side agreements. A tenant who signs an inaccurate certificate can be prevented from later asserting the true position against the purchaser or lender. If you have an unwritten arrangement about parking, signage or a rent abatement, the estoppel certificate is the moment it either gets recorded or gets lost.
We also review lease assignments and subleases on the sale of a business, surrender agreements, subordination, non-disturbance and attornment agreements requested by lenders, and landlord consent documents. In each case the question is the same and rarely obvious from the face of the document: what obligations are you taking on, and which of your existing rights are you giving up?
Assignments deserve particular care because most tenants encounter one only when they are selling the business, at the worst possible moment to discover a problem. Landlord consent documents routinely require the original tenant to remain liable for the balance of the term notwithstanding the assignment, require the incoming tenant to sign the landlord's current standard form rather than assume the existing lease, extract a fresh indemnity from the purchaser's principals, and charge the outgoing tenant the landlord's legal and administrative costs. Some also give the landlord a recapture right to terminate rather than consent, which can destroy the value of the transaction entirely. These points are far easier to address in the original lease than in the consent.
Subleases raise a further layer, because a subtenant's rights depend entirely on the head lease surviving. If the head tenant defaults and the head lease is terminated, the sublease generally falls with it. A subtenant should obtain a copy of the head lease, confirm that the sublease does not purport to grant rights the head tenant does not have, and where the exposure justifies it, seek a non-disturbance agreement directly from the head landlord. To have a commercial lease, renewal, assignment or offer to lease reviewed, contact Lexaltico LLP with the document and your deadline.
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