By: Kimberley Nguyen
Ms. Clarkson is a property owner in the province of Ontario. Over the years, she has become a well-known real estate investor in the Greater Toronto Area. As part of her investment portfolio, she acquired a residential detached home and a commercial industrial complex in downtown Toronto, both of which are registered solely in her name. She leased the residential home to Gregory Smith, and the parties entered into a standard residential lease agreement. Mr. Smith has resided at the property for the past two years with his wife and children. Throughout the tenancy, the Smiths and Ms. Clarkson maintained a positive landlord-tenant relationship and experienced no major disagreements. The Smiths were good tenants, while Ms. Clarkson was attentive to their concerns and promptly addressed any issues that arose.
Last year, Mr. Smith decided to open a widget manufacturing company. Ms. Clarkson kindly offered her commercial property for use as a warehouse for his new venture. The parties entered into a commercial lease after agreeing on the terms, including the duration, rent, security deposit, and permitted use of the premises. Having developed mutual trust and rapport over time, they expected their positive landlord-tenant relationship to carry on.
The widget company is Mr. Smith’s sole source of income. Although Ms. Clarkson verbally discussed with Mr. Smith that the tenancy would be for a standard five-year term, the lease contained a clause permitting her to terminate the tenancy at any time.
Over the past six months, however, due to extenuating circumstances, including old age and illness, Ms. Clarkson has failed to complete and repairs or maintenance at either property after Mr. Smith brought various issues to her attention. For example, Smith complained that both properties faced inadequate heating during cold winters, no hot water, and the presence of mould. Frustrated by what she perceived as constant complaints, Ms. Clarkson now intends to terminate both tenancies. She wishes to start afresh with a new tenant who will make fewer demands. Alternatively, if the Smiths remain her tenants, she would like to increase the rent for both properties to offset the costs of repairs that she otherwise cannot afford.
Mr. Smith, however, believes that, as the property owner, Ms. Clarkson is obligated to maintain the properties in a reasonable condition. Because she has failed to do so, he has withheld rent on both properties until the outstanding maintenance issues and repairs are resolved. He maintains that he has the right to remain in both properties until the end of the leases, even if he fails to pay rent on time.
What recourse is available to either party, and what legal protections apply to them? What enforcement issues arise, and what are their possible outcomes? Also, what procedural safeguards are available to resolve disputes arising from the commercial and residential tenancies they entered? Although both properties are owned by the same party, and leased by the same lessor, the legal regimes governing the two tenancies, and the procedures available to address their disputes, often differ starkly.
Introduction
In the province of Ontario, residential tenancies are subject to extensive statutory protections and procedural regulations. In contrast, commercial tenancies remain largely unregulated beyond the common law, with comparatively limited statutory regulation. This paper aims to examine the disparities between residential and commercial tenancy law and clarify the respective rights and responsibilities and lessors and lessees in relation to dispute resolution mechanisms, maintenance standards, and the default or withholding of rent. A focused analysis will identify legislative gaps in commercial tenancy law and highlight the practical implications of these differences for parties involved in both residential and commercial tenancies. The analysis was examine the history development of the relevant legislation, judicial interpretation, and jurisprudence.
History of tenancies in Ontario
In 1948, housing was recognized as part of the right to an adequate standard of living in the “Universal Declaration of Human Rights”.1 In 1966, the United Nations’ “International Covenant on Economic, Social and Cultural Rights” reiterated that the right to adequate housing should be protected through legislation.2 As cities grew and the number of tenancies continued to rise in Canada during this time, growing populations exerted political pressure on governments to reform regulations governing residential tenancies.3 Political activism around housing as a fundamental human right had built off international movements. Residential tenants were often in vulnerable positions, especially if they came from marginalized communities, while commercial parties were generally presumed to be sophisticated and capable of negotiating terms that served their best interests.
Prior to 1970, there was little distinction between residential and commercial tenancies in Ontario under the legislation in force at the time, the Landlord and Tenant Act. However, commercial leases were formerly regarded primarily as conveyances rather than contracts.4 Following the publication of the Ontario Law Reform Commission’s 1968 “Interim Report of the Ontario Law Reform Commission on Landlord and Tenant Law Applicable to Residential Tenancies”, the Landlord and Tenant Act was amended and regulations were introduced to distinguish between the two types of tenancies. Since then, significant legislative reforms have been made to residential tenancy law, while commercial tenancy law has remained largely a codification of the common law.5
These changes were, in part, prompted by the view that, unlike non-residential properties, housing represents “an important emotional investment and sense of security for individuals or families.”6 Therefore, residential tenants became subject to statutory protections, reflecting concerns that disparities in bargaining power between residential lessors and lessees could leave tenants’ concerns unaddressed and expose them to possible exploitation.7 As a result, Canadian jurisdictions have developed significant legislation governing residential tenancies that subjected them to significantly greater regulation than commercial relationships.8 These reforms included treating residential leases as contractual relationships, creating administrative tribunals for dispute resolution, regulating eviction processes, and adopting various forms of rent control.
Current Tenancies in Ontario:
Residential
In 1997, the province of Ontario overhauled the previous legislation from the 1970s, consolidating several legislative statues, including the Rent Control Act, Landlord and Tenant Act, Rental Housing Protection Act, Municipal Amendment Act, Residents’ Rights Act, and the Land Lease Statute Law Amendment Act, into one modernized framework. The Tenant Protection Act was subsequently passed by Premier Mike Harris’ Progressive Conservative government.9 The Act sought to balance the rights of landlords and tenants, while introducing several measures that favoured lessors. Its central objectives included “protecting tenants against unfair rent increases and arbitrary evictions […] improving maintenance and […] helping to increase the supply of new rental housing.”10 The legislation also marked a significant shift in Ontario by moving residential tenancy disputes away from the courts and into a less formal adjudicated system, including the Ontario Rental Housing Tribunal, which served as a predecessor to the current Landlord and Tenant Board.11
In 2006, the Residential Tenancies Act (“RTA”) was introduced by Premier Dalton McGuinty’s Liberal government to govern tenancies between residential lessors and lessees. Like its predecessor, the purpose of the RTA is “to provide protection for residential tenants from unlawful rent increases and unlawful evictions, to establish a framework for the regulation of residential rents, to balance the rights and responsibilities of residential landlords and tenants and to provide for the adjudication of disputes and for other processes to informally resolve disputes.”12 It introduced notable reforms, including the establishment of the Landlord and Tenant Board, which prioritized making the dispute resolution process of the Ontario Rental Housing Tribunal more customer-friendly, simple, and accessible.13 The RTA also sought to enhance protections for vulnerable populations, including seniors, low-income tenants, individuals with disabilities and those facing language barriers.14
The RTA also introduced provisions to provide tenants with greater protections, including strengthened rent control measures designed to prevent excessive rent increases while permitting landlords to increase rents based on the annual consumer price index, as well as maintenance standards, repair obligations, and limitations on security deposits. The legislation also established clearer eviction procedures and protections against illegal evictions. All eviction applications would now go through a hearing or mediation process, with adjudicators considering the relevant circumstances of both parties.15 A notable similarity between the RTA and its predecessor, however, is the retention of vacancy decontrol on rental units, which allows landlords to adjust rents to market rates following tenant turnover.16 The RTA nevertheless seeks to protect tenants from above-guideline rent increases.
The RTA remains in force today and since its enactment, has undergone numerous amendments to address emerging issues in Ontario residential tenancy system, including matters involving landlord-driven renovations and subsequent evictions. For example, one significant was the exemption of rent controls under the RTA for rental units that were either built before or occupied for the first time after November 15, 2018, in an effort to encourage investment and increase Ontario’s housing supply.17 In addition, the RTA formalized and extended the powers of the Landlord and Tenant Board as a quasi-judicial body to help parties in resolving disputes and accessing justice.18
Commercial
The Commercial Tenancies Act (“CTA”) came into effect as part of the legislative amendments concerning residential tenancies in 1997.19 As a result, commercial tenancies became a balancing act between the principles of property law and contract law, rather than being governed exclusively by statute.20 While the CTAprovides a broad statutory framework of rules for parties, it upholds the longstanding principal that commercial entities are generally sophisticated parties that have considerable control over their dealings, including the freedom to contract and negotiate the terms of their leases. This approach assumes that commercial lessees can respond to unfavourable terms by seeking alternative arrangements and moving freely in the market when negotiated terms do not align with the viability or economic needs of their businesses. All of which, are fundamental dogmas of contract law, as was reiterated by the Ontario Court of Appeal by Justice Tulloch: “Every day, sophisticated parties enter into commercial contracts to achieve their business objectives and provide certainty and stability for ongoing business relationships. Sometimes the parties’ subjective understandings of the deal they made diverge. In those circumstances, the courts are asked to intervene, and to hold parties to the bargain they struck by objectively determining the meaning of the words the parties chose within the context of the contract’s surrounding circumstances and commercial purpose.”21 Similarly, in First Edmonton Place Ltd. v 315888 Alberta Ltd., the Alberta Court of Appeal demonstrated that courts are generally less likely to intervene in contractual disputes between sophisticated commercial parties, particularly where those parties possess the resources and knowledge necessary to protect their interests during negotiations.22
Overall, the CTA has largely been preserved to reflect the unique nature of commercial leasing and the needs of businesses in comparison with personal housing. However, commercial parties nevertheless do not always possess equal bargaining power in practice, and vulnerable commercial tenants may have limited protection against potentially unethical practices, such as significant rent increase upon the renewal of a lease. Legislative debates have recognized both the unique needs of commercial tenants as well as the power differentials that can exist within the commercial sphere. Despite these concerns, the government has generally maintained a limited role in regulating business relationships and has favoured non-interference.
These tensions have been reflected in legislative debates. In 1990, while considering whether the government should intervene in or adopt a more hands-off approach to commercial tenancies, MPP Sterling argued: “I believe small business must be protected from unscrupulous practices, but I also believe the spirit of business and the whole essence of entrepreneurship requires business persons to make certain decisions and they must live by those decisions.”23 In addition, MPPs have recognized the overlap between populations impacted by unfair practices in commercial tenancies, such as family-operated small businesses, as the same populations who are protected under residential tenancies.24
Both the RTA and CTA therefore differ significantly, largely due to the underlying policy objectives and the legislative frameworks that apply to each. The following analysis examines three areas of commercial tenancy law to illustrate the power differentials that arise between landlords and tenants and to demonstrate how the RTA provides protections that may, to some extent, mitigate the consequences of unequal bargaining power for residential tenants. The fact pattern introduced above illustrates the two distinct legal paths that Mr. Smith must navigate in dealing with Ms. Clarkson: one that is governed by the CTA and the other by the RTA.
Dispute Resolution Mechanisms
For the residential property, Clarkson and Smith can turn to the Landlord and Tenant Board (“LTB”) to address their concerns and seek a resolution. The LTB, created in 2007, is one of Ontario’s administrative tribunals, and hears matters arising under the RTA. As an Ontario tribunal, its purpose is to deliver administrative justice in a fair, independent, effective, and efficient manner.25 The LTB promotes accessible procedures, fairness, transparency, timeliness, integrity, and independence by acting as an arbitrator in cases between landlords and tenants that have not been able to be resolved through alternative dispute resolutions, which parties are encouraged to pursue beforehand.
The Statutory Powers Procedure Act guides the LTB by outlining the scope and the limitations of their decision-making powers, and tribunals have power to control processes and to make its own rules.26 The LTB is intended to resolve claims efficiently while ensuring procedural fairness and avoiding the need to resort to the courts. Its role in dispute resolution reinforces the Supreme Court of Canada’s observation in Hyrniak v Molden that a conventional trial is neither required nor appropriate in certain civil disputes and that less complex cases may be resolved through alternative tools that better account for proportionality, timeliness, and affordability.27 When first proposed, the LTB was meant to make dispute resolution more understandable and accessible to parties, reduce user fees, and provide claimants with assistance in preparing their applications.28
In the case of Mr. Smith, he may submit an application to have his concerns heard by the tribunal; likewise, Ms. Clarkson may bring an application concerning unpaid rent. In doing so, the parties may be encouraged to participate in medication. A key feature of the LTB which supports accessibility is that parties without extensive legal knowledge may represent themselves rather than retain a lawyer. However, Mr. Smith and Ms. Clarkson may encounter common challenges arising from inefficiencies within the LTB, particularly prolonged delays. Such delays may compromise cases, delay the administration of justice, and more often than not, impact people’s livelihoods and quality of life.29
Although wait times improved between 2023 to 2024, the average wait time for non-payment of rent applications was roughly three months, while other application types took five to seven months.30 Tribunal Watch Ontario reported 53,507 outstanding cases in February 2024.31 Applications are assessed on a case-by-case basis, and several factors may be considered when determining when a matter will be heard, with the majority of applications submitted by landlords.32 Applications involving non-payment of rent are given priority and take up the majority of the LTB’s and adjudicators’ time. By contrast, tenants may experience longer wait times for matters involving maintenance and harassment, with some waiting three time longer than the average.33 As a result, tenants such as Mr. Smith, who may be dealing with a lack of hot water, heating, air conditioning, or pest infestations, may continue to experience substandard living conditions while awaiting a hearing because their applications receive lower priority than non-payment applications.34
The Cutting Red Tape, Building Ontario Act provides some procedural flexibility and allows the tribunal to overlook minor mistakes in applications where doing so does not “significantly prejudice a party’s ability to participate in a proceeding”35 and by permitting cases to be reassigned where an adjudicator fails to complete a hearing.36 Nevertheless, LTB proceedings overall seem to disproportionately benefit landlords because non-payment claims are heard more quickly, while all other claims, including those filed by tenants about substandard living conditions, have a longer wait time to be heard.37 Therefore, while Mr. Smith may file an application and have a legitimate claim for the issues regarding substandard water and hydro, the available data suggests that landlord applications concerning non-payment receive greater priority.38 Because Smith has withheld rent, Ms. Clarkson would likely benefit from the expedited treatment afforded to a non-payment application. Although Smith may be able to raise his complaints concurrently during the proceeding, his concerns may not receive the same procedural priority as the issue of non-payment.
The provincial government does not directly adjudicate commercial landlord and tenant disputes, and parties are advised to seek legal advice regarding their disputes and understand how the CTA applies in their situation.39 Instead, parties involved in commercial tenancy disputes concerning money or personal property under $50,000 to file a claim with Small Claims Court. Claims exceeding $50,000 must be brought before the Superior Court of Justice for a remedy.40 This framework may make self-representation more difficult, particularly in Superior Court, and commercial tenants such as Mr. Smith may need to retain legal representation where negotiations fail. They must therefore also be prepared to bear the potential steep legal costs associated with litigation. For small business owners with limited financial resources, pursuing just one claim can impose a significant financial burden.
In K.C. Granite & Marble Inc. v Takol Forgestone Meyerside Limited Partnership et al, a family-run fabrication business challenged an unlawful eviction conducted by their landlord, whose conduct demonstrated an intention to convert the property into industrial condominiums.41 This was despite the tenants having had a valid lease and making their rent payments on time. Although the tenant successfully obtained relief from the court to remain in the premises for the remainder of the tenancy and was subsequently awarded partial costs, it remained responsible for a portion of the costs associated with expedited hearings and discoveries, which can amount to tens of thousands of dollars.
In the context of the fact pattern, Mr. Smith would have to pursue qualifying monetary or personal property claims concerning his warehouse through Small Claims Court and bring other claims before the Superior Court of Justice.42 Unlike residential tenancies, there is no equivalent specialized administrative tribunal for commercial disputes. Where parties cannot resolve their disputes themselves, they must therefore turn to the courts. Court proceedings involve more extensive procedural requirements, including motions, applications, and responding materials, which add complexity and may make self-representation difficult.
Parties must also comply with the Rules of Civil Procedure, which are more complex than the procedures governing the LTB. Therefore, commercial parties may need to retain lawyers and experts and obtain legal advice concerning the CTA and its application to their particular circumstances. Although a specialized commercial tenancy tribunal could address some of these accessibility concerns, the province has not shown interest in creating such an administrative body.
Maintenance Standards
The Ontario Court of Appeal, in affirming an LTB decision in 2016, held that under the RTA, a landlord is required to make reasonable efforts to carry out repairs if there is a service interruption.43 However, a service interruption does not, by itself, constitute a breach of this obligation.44 It is up to the LTB to determine whether the efforts made were sufficient in the circumstances. Therefore, while the interruption of essential services such as heating or water in Mr. Smith’s home would not automatically establish a breach by Ms. Clarkson, she would nonetheless be required to make reasonable efforts to complete the necessary repairs.
Maintenance standards are regulated not only by the RTA, but may also be supplemented by municipal requirements and other safety regulations. The RTA contains provisions concerning “vital services,” including hot and cold water, electricity, and heating, except where tenants have expressly agreed to obtain or maintain such services themselves.45 Municipalities may also enact bylaws regulating rental units,46 including setting standards for such services and requirements for building inspections to ensure compliance by property owners.47 In the case of Mr. Smith, if his landlord is not providing “adequate vital services”48 in his residential rental unit in accordance with a vital service bylaw, then the municipality may “arrange for the provision of the service, and may register a lien for the cost plus an administration fee against the title to the property.”49 Depending on the municipality that the property resides in, applicable by-laws may also prohibit Ms. Clarkson from ceasing to provide her tenant with vital services, even if there is rent overdue, except when necessary to make essential repairs to the unit and only for a minimal period to complete the repair.50
Alternatively, Mr. Smith may also turn to the LTB for recourse for dealing with the disruption of vital services and maintenance issues. In Mackie v Toronto (City) and Toronto Community Housing Corporation, Justice Perell of the Ontario Superior Court of Justice highlighted the obligations of landlords under section 20(1) of the RTA to maintain residential premises in a good state of repair and fit for habitation. Otherwise, tenants may seek remedial orders from the LTB where landlords breach these responsibilities, including where their conduct substantially interferes with the tenant’s reasonable enjoyment of the rental unit.51
To seek relief from the LTB, tenants must complete the prescribed forms and engage in administrative processes laid out in the RTA. Such applications must be filed within one year of the alleged conduct.52 Mr. Smith may apply to the LTB for an order determining that Ms. Clarkson withheld or deliberately interfered with the reasonable supply of a vital service, for example, by failing to pay for water services she was obligated to provide.53 The court has held that landlord may not withhold or deliberately interfere with a reasonable supply of a vital services that is their obligation to provide, such as by failing to pay for those services.54 If the LTB has determined that she had done so, then it may order her to cease the conduct and grant remedies such as abatement of rent, an administrative fine, compensation for costs of repairing or replacing property and reasonable out-of-pocket expenses, termination of the tenancy agreement, or any other order the Board considers appropriate.55 If the LTB determines the landlord’s punitive measures forced the tenant to vacate the unit, then it may also order compensation for increased rent or other accrued costs.56 Moreover, if Ms. Clarkson owns an entire structure of two or more dwellings, she would further be subject to the Health Protection and Promotion Act, which provides for the delivery of public health services and the protection of the public from housing that does not meet basic sanitary standards. However, if Mr. Smith is renting an entire detached home, then the public health measures do not apply.57
In Marling v Lawerence, the LTB held that adequate evidence is required to support claims by tenants that a landlord is withholding vital services punitively or deliberately.58 Similarly, tenants alleging that a landlord has abused the right of entry to pressure them to vacate the premises must provide evidence supporting that allegation. Tenants can also submit applications to the LTB for substantial interference of their reasonable enjoyment of the rental property, such as by harassing, threatening, interfering, or coercion directed at the tenant or a member of their household.59
In contrast, the CTA makes no allowances for the maintenance of rental properties and provision of vital services. “Historically, the common law has imposed few obligations on the landlord and left virtually all terms of the lease arrangement, apart from the grant of bare possession, to the parties’ contractual negotiations.”60 For example, in a standard form commercial lease for an commercial/warehouse lease available through Practical Law places responsibility for services such as heating, water, and hydro on the tenant.61 Although informed commercial parties can negotiate different terms, the use of such provisions in standard lease forms illustrate that it is the norm for tenants to shoulder the risks and financial costs for vital services, leaving landlords with comparatively limited obligations.
Default of Payment
Because Mr. Smith is in default of rent in both his residential and commercial rental properties, there are notably different protections and remedies available to the parties. Where a residential lessee is in default of rent, the lessor must go through the LTB for a remedy, such as proceeding with an eviction process. Ms. Clarkson would be required to provide Mr. Smith with 14 days’ notice before starting the eviction process and notify him of the amount due and provide him with the opportunity to pay the arrears.62 Interfering with the tenant’s access to the premises, such as by changing the locks on the property, or seizure of any assets, are not listed as possible remedies under the RTA.
However, under the default rules of the CTA, if Mr. Smith’s rent remains unpaid for fifteen days, then Ms. Clarkson may elect to terminate the lease and repossess the premises without notice.63 Depending on the circumstances and the lease terms, she may also be entitled to claim damages associated with future rent.
Since the seventeenth century, commercial landlords have had extrajudicial remedy of “distress,” which permits them to enter leased premises and seize chattels as security for rent arrears.64 This practice is still exercised today so long as the landlord-tenant relationship continues and must be done between sunrise and sunset, which was reaffirmed by the Ontario Court of Appeal.65 Because commercial leases generally limit the obligations and liabilities of property owners, there does not seem to be anything in the CTA that states that a landlord would be in breach. Instead, it is under the assumption that it is the tenant that would be in breach or default.
More generally, traditional remedies for non-payment or repudiation of a commercial lease may include termination of the lease with or without holding the tenants to the remainder of the lease or seizing and selling assets located in the premise without a court order or applying for an injunction. The Supreme Court of Canada’s ruling in Highway Properties was a major decision that expanded the remedies available to landlords for breaches of commercial leases, particularly in cases of wrongful repudiation.66 For example, landlords may sue for expected damages (i.e. expected future rent for the remaining lease term), as well as damages for rent accrued before the repudiation. Landlords would still be expected to mitigate their losses after a breach, such as by attempting to re-lease the premises. This decision also reinforced the contractual character of commercial leases and the availability of remedies for defaults beyond those recognized under traditional property law principles. The decision has influenced how parties’ draft commercial leases and include other provisions to claim damages for default such as allowing for locks to be changed without notifying the tenant. Legal scholars Brock and Phillips have argued that the decision was a hybridization of leasehold law and contract rules into what is still a property-dominated paradigm and that reforms should eliminate all property law elements in commercial leases and transition to “full contractualization.”67
Conclusion
The RTA and CTA establish significantly different legal frameworks for residential and commercial tenancies. Each statute serves different purposes for landlords and tenants, reflecting distinct social and economic interests. Governments in Ontario have recognized the need for greater regulation in the commercial space, as it can impact the livelihood of business owners, given that housing is a social good. Ontario’s residential tenancy regime imposes greater statutory regulation on the landlord-tenant relationship. As one scholar has observed, “[t]he core function of a legal concept of home is to provide a framework within which the human experiences of occupiers can be debated, explored, articulated and evaluated.”68 Consistent with this approach, the RTA provides a tenant-focused approach to dispute resolution to address the inherent power differential between tenants and landlords in the residential sphere.
The creation of the LTB further distinguishes the residential framework by providing a specialized administrative forum for landlord-tenant disputes. Its procedures are intended to be accessible to those without the legal expertise or the funds to hire a lawyer. In contrast, the CTA largely preserves the contractual freedom of independent parties, permitting commercial parties to negotiate and define their respective rights and obligations. This framework reflects a model of commercial contracting which assumes that all actors have the capability and means to assess their interests and bargain accordingly. Commercial tenants may therefore assume greater responsibility for matters such as property maintenance and vital services, while commercial landlords have stronger and more immediate remedies in cases of default. If parties are unable to resolve their disputes, they must turn to either Small Claims Court or the Superior Court, where legal advice and representation may become necessary.
The differences are apparent in the areas of dispute resolution, maintenance obligations, and breach of contract. Residential tenancy disputes are governed by a specialized statutory and administrative framework through the LTB, whereas commercial disputes are more heavily shaped by contract law, property law, and the courts. The commercial side is more adversarial, where there is a winner and a loser when parties engage the courts.
Residential landlords are subject to statutory maintenance and vital-service obligations, supplemented by municipal standards, while commercial leases may allocated many, if not all, of these responsibilities to the tenants. However, commercial landlords generally possess broader and more immediate remedies when dealing with defaults, whereas residential landlords must follow the notice and adjudicated procedures prescribed by the LTB.
Although commercial tenants are generally perceived as having the autonomy and sophistication to negotiate favorable contracts and terms, meaningful power imbalances may still exist, much like in residential tenancies. Contractual freedom allows parties to negotiate terms as they see fit, but disparities in bargaining power, financial resources, and legal knowledge can leave some tenants at a disadvantage. In Mr. Smith’s circumstances, for example, responsibility for vital services and the possibility of rapid enforcement following default could place his business in a particularly vulnerable position. Unequal bargaining power and inequities in knowledge and resources may indicate to policy makers that more regulation may be required in this space. If he is solely responsible for vital services at his commercial rental facility, then he would be putting himself at risk of having to relocate his business for failure to pay rent. While market flexibility and minimal government intervention remain important principles of contract law, policymakers may need to reconsider whether additional safeguards are necessary to prevent unfair outcomes in commercial leasing.
Residential and commercial tenancies serve different purposes and therefore need not be regulated identically. However, significant gaps remain in the current two regimes. As the law evolves, policymakers should consider whether existing commercial tenancy laws adequately protect smaller and less sophisticated tenants who may lack substantial negotiating power, while preserving the flexibility necessary for commercial relationships. Tenancy laws require a balance between regulatory protection and contractual autonomy. Striking a balance between regulatory oversight and contractual freedom is essential to ensuring fair and functional leasing practices. However, overregulation in one sector and insufficient oversight in another creates disparities that call for further research, debate, and legislative reforms to achieve more equitable approaches.
Table of Authorities
Legislation
Commercial Tenancies Act, RSO 1990, c L.7.
Cutting Red Tape, Building Ontario Act, 2024, c 28, s 24.
Health Protection and Promotion Act, RSO 1990, c H.7.
O. Reg. 517/06.
Residential Tenancies Act, SO 2006, c 17.
Restoring Trust, Transparency and Accountability Act, 2018 SO 2018 c 17.
Statutory Powers Procedure Act, RSO 1990, c S.22.
Tenant Protection Act, SO 1997, c. 24, s 213.
Jurisprudence
2105582 Ontario Ltd. v 375445 Ontario Ltd., 2017 ONCA 980.
Drewlo Holdings Inc. v Weber, 2011 CarswellOnt 15280 (Ont. Div. Ct.).
First Edmonton Place Ltd. v 315888 Alberta Ltd., [1988] 40 C.L.R. 1 (ALTA. C.A.).
Highway Properties Ltd. v Kelly, Douglas and Co. Ltd., [1971] SCR 562.
Hryniak v Mauldin, 2014 SCC 7, [2014] 1 SCR 87.
K.C. Granite & Marble Inc. v Takol Forgestone Meyerside Limited Partnership et al., 2021 ONSC 6819.
Khokhlov v Metcap Living Management Inc., 2013 CarswellOnt 17819 (Ont. Div. Ct.).
Mackie v Toronto (City), 2010 ONSC 3801.
Manpel v Greenwin Property Management Inc., 2005 CarswellOnt 3147 (Ont. Div. Ct.).
Marling v Lawrence, 2022 ONLTB 9637.
Mejia v Cargini, 2007 CarswellOnt 666 (Ont. Div. Ct.)
Onyskiw v CJM Property Management Ltd, 2016 ONCA 477.
SS&C Technologies Canada Corp. v The Bank of New York Mellon Corporation, 2024 ONCA 675.
Toolabi v Simpson, 2019 ONSC 2686.
Secondary Sources
Advocacy Centre for Tenants Ontario, “Vacancy Decontrol – What is it , and Why Does it Matter?” (2021).
“Bill 96, Tenant Protection Act”, 1st reading, Ontario Legislative Assembly Debates, 36-1 (21 Nov 1996).
“Bill 109, Residential Tenancies Act”, 1st reading, Legislative Assembly of Ontario, 38-2 (3 May 2006).
Government of Ontario, Legislative Assembly, “Consumer Rent Protection”, 34-2 (3 May 1990) at 1020 (Sterling).
Government of Ontario, “Renting Commercial Property in Ontario” (20 September 2024).
“International Covenant on Economic, Social and Cultural Rights”, 16 December 1966, 993 UNTS 3, (GA Res 2200A (XXI), entered into force 3 January 1976).
Lorna Fox O’Mahony, “The Meaning of Home: From Theory to Practice” (2013) 5:2 McGill LJ 156 at 166.
Mary Jane Mossman, “Property Law: Cases and Commentary” (Toronto: Emond Montgomery, 2019).
Practical Law Canada Commercial Real Estate, “Commercial Lease: Industrial/Warehouse Lease (Medium Form),” Practical Law, (2024).
Priscilla Ki Sun Hwang, “Woman Risking Homelessness Because Tenant Won’t Leave Gets Eviction Hearing Date ”, CBC News (November 11 2022).
“Tenants Question if Ontario’s Landlord and Tenant Board Timelines are Improving ”, CBC News (29 November 2024).
Tribunal Watch Ontario “LTB Statement of Concern: The Numbers Speak For Themselves” (14 February 2024).
Tribunals Ontario, “Mandate and Mission Statement” (2020).
Universal Declaration of Human Rights, UNGA, 3rd Sess, UN Doc A/810 (1948) GA Res 217A (III).