Commercial lease rules in BC that surprise people

General information, not tax or legal advice. Every deal is different. Talk to your lawyer and accountant before you act on anything here.

The lease is your protection

Business leases fall under the Commercial Tenancy Act, not the Residential Tenancy Act. There’s no annual cap on rent increases. During a fixed term, the rent is what the lease says. A month-to-month tenancy gives you little protection, because the landlord can end it with proper notice and offer a new deal at a higher rent. If the location matters, get a fixed term and renewal options.

Repairs: tenant beware

For unfurnished commercial space, the landlord has no general legal duty to repair. You take the space as you find it, and the lease decides who fixes what. Inspect before you sign, and make sure the lease spells out who looks after the roof, structure, HVAC and other building systems.

If rent isn’t paid

A commercial landlord has stronger remedies than many tenants expect. They can sue for the rent, take back the premises and end the lease, or seize and sell the tenant’s goods to cover arrears, which is called distress. A landlord who ends the lease can also claim damages for the rent lost over the rest of the term. If cash is tight, talk to the landlord early. I can help you open that conversation.

Ending a lease by accident

A lease can end by surrender: the tenant offers to give the space back and the landlord accepts. A surrender can also happen by conduct. If a landlord acts as if the tenancy is over, for example by re-letting the space for itself after a tenant walks away, the law may treat the lease as ended, whatever either side intended. Put any early exit in writing. See lease surrender.

Assigning and subletting

Unless the lease says otherwise, a commercial tenant can assign or sublet without the landlord’s consent. Most leases do say otherwise, and courts read those restrictions strictly, so the exact words matter. A sublease has to leave you at least a day at the end of your own term, or it’s treated as an assignment. More in assignment and sublease.

Put it in writing, and think about registering

Under the Law and Equity Act, a lease longer than three years has to be in writing to be enforced. A lease of three years or less is protected against a new owner if you’re in possession. A longer one generally needs to be registered on title at the LTSA to bind a buyer. Ask your lawyer whether to register yours.

Questions people ask

Is there a limit on how much a commercial landlord can raise the rent?

Not by law. During the term, the lease sets the rent. At renewal, it depends on what your renewal option says, which is why the wording of that clause matters.

Does my landlord have to fix the roof?

Only if the lease says so. For commercial space there’s no general duty on the landlord to repair, so check the repair clauses before you sign.