Not-Quite-Absolute Obligations: Reasonable Limits On Lease Covenants To Repair & Restore

Both commercial landlords and their tenants should take heed: under Canadian common law, even the most water-tight lease covenants to keep in repair and restore the premises upon the expiration or other termination of a lease may not be stringently enforced by the courts.

Usually, a court will require a commercial tenant to fulfill its side of the bargain that it freely entered into under the lease agreement. Where there are extraordinary circumstances, or the tenant can otherwise present a compelling case that the degree of repair and restoration apparently required by the plain terms of the lease is beyond the reasonable expectations of the contracting parties, however, the result may differ. Caselaw supports an argument that a court ought to infer certain limits into a commercial tenant's covenants to repair and restore leased premises to give effect to such reasonable expectations. These authorities provide certain levers the outgoing tenant can seek to pull to