Being Precise In Exercising Renewal Rights

The recent Manitoba Court of Appeal case of 441 Main Inc. v Silver Pawn Pictures Inc., 2013 MBCA 70 is a reminder of how important it is to be precise when exercising renewal or extension rights.

Many commercial leases contain an option in favour of the tenant to renew or extend the term of its lease. Usually such renewal or extension is at a new market rent and otherwise on the same terms. A process to settle the rent by negotiation and, failing that, by arbitration is usually set out.

Since such an option benefits only one of the parties, the tenant, the law regards it as a privilege. As a result of this privileged status, the tenant must strictly comply with the terms and conditions of the renewal or extension right in order to obtain its benefit. This includes compliance with all the stipulations set out in the lease as to the time, place and procedure for exercising. As indicated in the 441 Main Inc. case, it is also critical that the wording used to exercise