When The Tenant Wants To Dump The Lease And The Landlord Doesn't, "Whose Problem Is It?"

In Canadian common law jurisdictions, when the tenant defaults under a commercial lease, the landlord doesn't have to do anything. The landlord can simply insist that the lease remain alive, and demand that the tenant pay the rent as it comes due.

Landlord's Remedies

When a tenant breaches a commercial lease, a landlord has 4 options that were authoritatively set out by the Supreme Court of Canada in the landmark 1971 decision of Highway Properties Ltd. v Kelly, Douglas and Co. Ltd.

The 4 options are: (1) keep the lease alive and demand payment of rent when due; (2) terminate the lease and pursue a claim against the tenant for arrears; (3) re-enter the premises and sublease them on the tenant's behalf; and (4) terminate the lease and pursue a claim against the tenant for not only arrears, but also "damages" in the form of rent payable over what would have been the balance of the term.