Expertises connexes

Commercial leases generally fall within the area of contracts. However, the commercial area is full of nuances that must be measured to fully grasp the nature of the issues. Indeed, negotiation is all the more important when the tenant and the landlord maintain a business relationship beyond the simple lease. For all these reasons, the drafting and review of commercial leases must be done with care by experienced professionals.

Litigation of commercial leases generally follows the following course:

  1. failure of the tenant or landlord to comply with one or more of their obligations;
  2. study and review of the commercial lease, analysis of clauses and penalties if applicable;
  3. sending a notice, generally in the form of a duly served demand letter;
  4. filing of an introductory motion when no agreement is reached. It will generally take a period of at least a year to get a hearing before the Court, after the case is finalised for hearing;
  5. possibility of seeking an injunction or a safeguard order to protect the rights of the affected party pending trial;
  6. the duration of a trial is variable depending on the complexity of the case;
  7. similarly, the judgment may be rendered in more or less time after the trial;
  8. finally, the execution of the judgment, if it is not voluntary, must be requested by “writ” at the courthouse and will be executed by a bailiff.

In addition to identifying the parties and the premises or building, a commercial lease contains or should contain:

  • term of the lease;
  • mode of renewal (automatic or express, requirement for a notice of renewal or non-renewal);
  • payment of rent (annual, quarterly, monthly or weekly payment, by check or bank transfer, indexing, etc.);
  • distribution of rent expenses (water, electricity, repairs, housekeeping, etc.);
  • use of the leased premises, destination;
  • terms of subletting and assignment;
  • methods of rehabilitation of the property;
  • initial security deposit;
  • insurance and liability;
  • events of default, termination clause and penalties;
  • exclusivity clause (e.g. in a shopping center, guarantee of exclusivity for a pharmaceutical business);
  • arrangements for publication of the lease;
  • clause providing for mediation and arbitration;
  • election of domicile for legal purposes.