Tenants are routinely requested by landlords to execute estoppel certificates in favour of purchasers or lenders as to the status of their leases. Most tenants ensure there are no ongoing performance defaults (such as a failure to repair) or monies owing by the landlord (such as for year-end adjustments). How many tenants review their lease carefully before signing?… Continue Reading
As many companies, particularly retailers, seek to monetize assets or at least leverage valuable real estate assets, we are witnessing increased popularity of sale leaseback transactions.… Continue Reading
Operating Costs – they are discussed endlessly during the lease negotiations and then often become the most contentious ongoing issue between landlord and tenant.
The almost universal practice is that at the beginning of each year landlord estimates operating costs and tenant pays in instalments based on that estimate. Shortly after the end of the year the landlord delivers a statement of operating costs for the past year which may be certified or audited depending on the provisions of the lease. … Continue Reading
The Quebec Court of Appeal in Meyerco Enterpresis Ltd. v. Kinmont Canada Inc. (2016 QCCA 89) has recently partially overturned a lower court ruling that awarded damages for a false estoppel signed by a tenant based on application of a cap rate paid by the buyer and addressee of the estoppel instead applying general principals of damages including mitigation.… Continue Reading
One of the most difficult and common problems faced by a landlord is a tenant who is unable or unwilling to pay rent. Under s. 104 of the Alberta Civil Enforcement Act, a landlord may seize the personal property of a residential or commercial tenant in order to secure the landlord’s claim for unpaid rent under the lease (although seizure is typically much more effective in a commercial context). This is called the landlord’s “right of distress.”… Continue Reading
A dirty estoppel is much like a Dirty Martini, except it packs a much bigger hangover if not properly digested.
On almost all major commercial real estate transactions today, a buyer will get few if any representations on the leases other than a statement that all of them have been delivered as well as a rent roll.
Instead the buyer will seek comfort on the estoppels to be delivered by the tenants (the figurative horse’s mouth) who in theory are making representations directly to the buyer and their lender and implicitly releasing vendor from past claims (enhanced by having the … Continue Reading
On a recent hot summer-like day, my neighbours’ pre-school boy, Charlie (pseudonym), sauntered over the front lawn in his pajamas to peek into my garage. Charlie had his gaze fixed on the foosball table, once a crown jewel of my college days and now just collecting dust in a corner. Charlie asked in the sweetest manner “can I play with that”? Normally, this would not be an issue. However, in an attempt to preserve all of Charlie’s limbs until at least adolescence, I replied that he could play only after I had vacated the menacing and precariously-balanced machines surrounding the … Continue Reading
One critical factor in the success of a multi-tenant retail centre is the ability to entice tenants occupying different niches in the consumer product market to foster an ecosystem of goods and services attractive to the target consumers. The permitted use provision is a critical tool available to the landlords of multi-tenant retail centres in planning such an ecosystem and reserving certain uses for certain tenants. A recent Ontario Court of Appeal decision reminds us the importance of including explicit exclusions in the permitted use provision of leases if the landlord intends for such uses to be excluded or reserved … Continue Reading
The first is that responses are typically available only after thirty days and beyond most due diligence periods, creating the “unkown unkowns” category.
If the transaction allows time for receipt before waiver and violations disclosed ( the “known knowns”) the reader must then further inquire as to whether the violations are outstanding (typically authorities do not necessarily follow up or note corrections). Violations are also often dated, possibly time barred or tenant matters. Regulators are also not required to note corrections (often loath to … Continue Reading
A commercial tenant may apply to court for relief from forfeiture when faced with the termination of its lease by a landlord, but can a residential tenant also seek such relief? That question was recently answered by a 5 member panel of the British Columbia Court of Appeal in Ganitano v. Metro Vancouver Housing Corporation, 2014 BCCA 10.
In Ganitano, a residential tenant had leased the same townhome for 28 years but had repeatedly failed to pay rent when due. The landlord eventually terminated the tenancy by following the procedure set out in the Residential Tenancy Act… Continue Reading
In a topsy-turvy world, the relative strength and stability of Canada’s economy continues to attract foreign investment, including our commercial and residential real estate sectors.
Since it may not always be advantageous for foreign companies to incorporate a Canadian entity, Canadian businesses are more likely today than ever to have dealings with non-resident companies, whether as buyers, sellers, landlords, tenants or financiers.
Transacting with a foreign company raises a host of issues that need to be thought about. To illustrate just one, consider a situation where a Canadian landlord wants to enforce a covenant in a lease – say a … Continue Reading
On December 12, 2013, amendments to section 173 of B.C.’s Strata Property Act, SBC 1998, c 43, came into force that allow strata corporations with majority support to apply to the BC Supreme Court to require strata owners to pay for certain repairs.
Prior to the amendment, strata corporations required a ¾ vote in favour to impose a special levy to raise money for needed repairs to common property. This could result in deadlock and delay when owner opinion was divided, exacerbating damage and unsafe conditions.
On application by a strata corporation within 90 days of it receiving at least … Continue Reading
Landlords and tenants beware! If you are a landlord and you do not pay enough attention to the tax recharge provisions in your leases, you can end up out of pocket tens or even hundreds of thousands of dollars on the annual tax recharge balance sheet. As we all know, if you do not have a contractual ability to collect, you still have to pay.
Yes, sadly, for all involved, property taxes will always be a part of our reality. Similarly, if the devilish little details are not adequately addressed, a tenant can be surprised by receiving a bill for … Continue Reading
Property rights are “sacrosanct” in Canada… or at least that is what courts tell us. The practical reality is somewhat different. This was highlighted a recent incident in Calgary where a landlord had her home declared an “embassy” by a tenant who refused to vacate. The situation made headlines across the country. The incident brought attention to the rise of freemen-on-land, a group whose legal tactics are summarized in Meads v. Meads, 2012 ABQB 571. However, the incident was also emblematic of a problem that can arise for any commercial landlord or property owner in Canada: how to … Continue Reading
No landlord wants to be sued. That said, lawsuits happen. Having acted for both commercial landlords and tenants, I have observed that several themes prevail when relationships go sour. The areas of disagreement can arise at the outset (e.g., how can you screen prospective tenants) and continue to the end of the relationship (e.g., what can you really do with the security deposit).
A general guideline for landlords as is follows: Just because the lease is not titled a “contract”, it is one. The lease is the document that governs the relationship between the parties, providing significant economic value to … Continue Reading