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Some Key Points to Consider When Entering a Commercial Lease as a Tenant – Part Three
Taimoor Qureshi
March 27, 2025
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In previous blog posts, we provided an introduction into some keys points that you need to consider when entering into a commercial lease as a tenant:
In this blog post, we will go into a bit more detail about some of those items.
Rights to assign the lease:
No one can predict the future. As such, at the time of entering a lease, you may have thought that the premises that you are leasing will be the place of operation for your business for years to come. Based on that, you may have entered into a long-term lease (i.e. 5 years or 10 years). However, it may turn out that your business ends up being so successful that your operations now have the need for a bigger space. Or in an opposite scenario, your business is not as successful as you thought it would be and now you can no longer carry on with the lease.
Unfortunately, in either of these scenarios, you are still liable to your landlord for the entire term of the lease. As such, it is imperative to negotiate a detailed right of assignment prior to entering into a lease as this option may allow you to assign the remaining lease term along with all of the responsibilities of the tenant in the lease to a third party.
Rights to sublet the lease:
Similar to the second part of the scenario above, perhaps you can continue to operate from the leased premises for the rest of the lease term, but you no longer require the entire leased premises for your business. In such circumstances, it may be financially viable for you to sub-let the part of the leased premises that you no longer require to a third party. In such arrangements, you essentially play the role of a sub-landlord for the parts that are being sub-leased by a sub-tenant. However, this right is not automatically granted and as such it is vital to negotiate this prior to the execution of the lease.
Prior to signing any commercial lease agreement, it is essential to have it reviewed by a lawyer who is well versed in commercial tenancies.
Be on the lookout for a future blog post which will cover in further detail some of the other key items that are important in a commercial lease. For more information about this topic, please feel free to contact one of our lawyers! Email us at info@kormans.ca or call (905) 270-6660.
Taimoor’s practice areas include Commercial law; Commercial Leasing; Corporate law; Mortgages; Residential Real Estate; and Wills and Estates.Taimoor was called to the Bar of Ontario and joined Kormans LLP in January 2019.Prior to joining Kormans LLP, Taimoor articled and clerked for boutique law firms where his exposure to residential and commercial matters from beginning to end helped develop his knowledge and skills in the aforementioned areas of la.
Taimoor is a strong believer in efficient client communication and does his best to keep clients as up to date as possible along all steps of a transaction.In his spare time, Taimoor is an avid follower of all major sports and enjoying the outdoors during the summer months.
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