Long-term commercial leases are a cornerstone of modern real estate development and retail stability, but they also carry a series of statutory risks that can undermine even sophisticated transactions. In Ontario, the Planning Act, RSO 1990 c P13 (the “Planning Act”) imposes subdivision control rules that reach beyond traditional conveyances and, in defined circumstances, apply with equal force to commercial leases. Certain long-term leases and lease-like interests may therefore be rendered legally ineffective if they are not carefully structured.
The subdivision control regime under the Planning Act is commonly associated with severances and land transfers. Less well-appreciated is its application to agreements that grant a use of or right in land for extended periods. Section 50(3) of the Planning Act prohibits any person from entering into an agreement that grants a use of or right in land for a period of twenty-one years or more, whether directly or through renewal rights, unless
