What Should I Look for in a Commercial Lease Before Signing?

What a commercial lease actually is

A commercial lease is a contract between a landlord and a business tenant that sets the rent, the term, and who is responsible for what in a non-residential space. Unlike a residential tenancy, a commercial lease has few automatic default protections built in by law: the document itself is largely the rulebook for the relationship, so what is written (and what is left out) carries real weight. Commercial leases typically run 3 to 10 years, and a tenant should confirm the exact commencement date, the end date, and what happens if the space is not ready on the agreed move-in date before signing anything.

The rent structure: gross, net, or triple-net

The single biggest driver of your real occupancy cost is which rent structure applies. A gross lease bundles most operating costs into one rent figure; a net lease passes some costs (often property tax) to the tenant separately; a triple-net (or “net-net-net”) lease passes on all of the costs of operating the building, including repairs and maintenance, to the tenant on top of base rent. Before comparing a headline rent number to another listing, confirm which structure you are actually being quoted, since the gap between a low base rent on a triple-net lease and an all-in gross rent elsewhere can be substantial.

Insurance and maintenance obligations

Landlords commonly have the right to insist that tenants carry their own liability insurance, to protect the landlord against claims arising from the tenant’s business activities, along with coverage for contents and any improvements the tenant makes to the space. Heating, ventilation, and air conditioning (HVAC) service is usually the landlord’s responsibility, but it is rarely provided on a 24-hour basis, so a tenant with extended hours or temperature-sensitive operations should check whether the lease includes a scheduled HVAC clause that matches actual business hours.

Rent increases and notice requirements: Ontario

Ontario has no standard commercial lease form, but the provincial government notes that most leases should still spell out the rent amount, the rules for any rent increases, and the notice required to change or end the tenancy. For a month-to-month tenancy in Ontario, either the tenant or the landlord must give at least one month’s written notice, ending on the last day of a month. A fixed-term lease works differently: it requires no notice to end, and the tenant must simply vacate by the date stated in the lease.

Landlord remedies for unpaid rent: Ontario

Ontario’s Commercial Tenancies Act gives landlords a remedy called distress: the right to seize and sell a tenant’s goods on the premises to recover unpaid rent. This right exists by statute even where the lease itself says nothing about it, and it applies alongside (not instead of) a landlord’s right of entry for non-payment of rent, waste, or other forfeiture, which the Act also preserves regardless of the specific lease wording. A landlord cannot use eviction and distress at the same time, and the Act limits distress to the tenant’s own goods, with limited exceptions, so a tenant storing goods belonging to a third party on the premises should check how this protection applies to those goods.

Registration and enforcement: Alberta

Alberta does not have a general commercial tenancies statute comparable to Ontario’s Commercial Tenancies Act. Its Commercial Tenancies Protection Act was a temporary measure that applied only to specific tenancy agreements affected by the COVID-19 public health emergency, and it is not current, ongoing law for general commercial leases. Alberta’s Civil Enforcement Act does define distress (a landlord’s right to seize goods for unpaid rent) as a recognized enforcement mechanism, so tenants reviewing a default clause should understand this term even without a dedicated commercial tenancies act behind it.

Under the Land Titles Act, a commercial lease of 3 years or less, where the tenant is in actual occupation, is automatically protected against a subsequent purchaser of the property as an implied exception to title, even without registration. A longer lease is not automatically protected in the same way, so registering the lease by caveat is the mechanism available to secure priority. Where the rents under a lease, or an equitable interest in it, are assigned (for example, to a lender), registering a caveat under the Land Titles Act protects that interest, gives it priority, and lets it run with the land under Alberta’s Law of Property Act.

What this means when reading the lease itself

Because commercial leases carry few automatic protections beyond what a province’s statutes provide, the practical checklist comes down to: confirm the term and start date, identify the rent structure, confirm who insures what, check the HVAC service commitment, and then apply the notice and remedy rules of the province the property sits in. A lease drafted for a landlord in one province will not automatically carry the same distress or registration consequences in another, so the same clause can mean different things depending on whether the space is in Ontario or Alberta.