Covid-19 Pandemic Closures: Considerations For Commercial Tenants And Landlords

Sabrina Saltmarsh, B.A. (Hons), J.D.Building | Property Management, Business Disputes, Business Interruption, Commercial and Contract Litigation, Commercial Contracts, Commercial Lease Arbitrator, Commercial Leasing, Commercial Litigation, Contract Termination, Coronavirus, COVID-19, Force Majeure, Franchise | Licensing, Government Action, Injunction & Specific Performance, Insurance, Property Management, Real Estate Litigation, REIT Disputes, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

What can commercial tenants and landlords do to protect themselves from the impact of Covid-19 related closures on commercial lease obligations? Here are some tips for businesses who are in the difficult situation of having to deal with potential defaults on commercial rent obligations related to closures or reductions due to the Covid-19 situation. 1. Review The Lease Agreement Carefully For Potentially Relevant Clauses In Ontario, the commercial landlord-tenant relationship is governed by the Commercial Tenancies Act, R.S.O. 1990, c. L.7., (the “Act”) which outlines the relationship, rights and obligations between commercial landlords and tenants. However these relationships are heavily governed by the commercial lease agreement in place between the landlord and the tenant, which can take precedence over the Act based on the agreement of the parties. Review the Act and more importantly, review your commercial lease agreement carefully to appreciate whether the agreement contemplates the type of situation … Read More

Capturing Online Sales in Shopping Mall Commercial Leases

Gilbertson Davis LLPCommercial and Contract Litigation, Contract Disputes, Counterfeit Goods, eCommerce | Online Retail, Shopping Mall Lease Disputes, Shopping Mall Lease Litigation0 Comments

As more business is done online, and as traditional brick-and-mortar retail stores decrease in popularity, shopping malls and retail shopping landlords are looking for more creative methods to maximize rental income. It is not uncommon for a shopping mall lease to require the tenant to pay a percentage of their sales as part of the additional rent. Many stores, however, also do a significant amount of business online. While tenants usually consider such sales to be separate from sales at their physical storefront, landlords may consider those sales as attributable to the storefront and subject to additional rent.  It is important for any commercial lease to be clear how additional rent is calculated, and if additional rent includes a percentage of revenues, it should be clear to all parties what revenue is included and what revenue is excluded. Where a lease is unclear, the court will often rely on the principle of contra proferentum and … Read More