The Overholding Provision In A Commercial Lease

Almost every commercial lease has an overholding provision. Although the exact words vary, the typical provision provides that if the tenant continues to occupy the premises following the end of the term, there is deemed to be a month-to-month tenancy terminable by either party on one month's notice and with rent at some percentage (from 100% to 200%) of the rent paid in the last month of the term.

The fact that a lease may have a provision titled "overholding" has from time to time resulted in tenants having a misconception that there is some right to stay in the premises after the end of the term. The Court of Appeal in Ontario seems to have put this issue to rest in the case of AIM Health Group Inc v 40 Finchgate Limited Partnership by clearly stating there is no such right based on a typical overholding clause.