You arrive on Monday and your key does not work. There is no tribunal to call, no automatic stay, and no hearing already scheduled. That is commercial tenancy law working as designed.
Commercial leases in Ontario are governed by the Commercial Tenancies Act and ordinary contract law. Disputes run through the courts, not the Landlord and Tenant Board, and a commercial landlord can generally re-enter for non-payment of rent without ever seeing a judge. Business owners who assume residential protections apply discover otherwise at the worst possible moment.
First question: was the lockout actually valid?
Often it is. But not always, and the questions worth asking within the first day are specific:
- Was rent genuinely in arrears, on the lease's own definition of rent, on the date the landlord acted?
- Did the landlord waive the default by accepting rent after it arose?
- Did the lease require notice that was not given?
- Had the landlord already elected an inconsistent remedy?
The election trap, which is usually the tenant's best argument
A landlord's remedies are largely inconsistent with one another. Distraining for rent, which means seizing and selling the tenant's goods on the premises, affirms that the lease continues. Terminating and re-entering ends it. A landlord cannot sensibly do both, and a landlord who seizes goods for arrears and then purports to terminate for those same arrears has a real problem.
This is why the sequence of what the landlord did, and in what order, is the first thing to reconstruct. It is frequently more productive than arguing about whether the rent was owed.
Relief from forfeiture
Where the re-entry was valid, the route back into the premises is relief from forfeiture: a court order restoring the lease. Courts weigh the seriousness of the breach, the disparity between what the tenant stands to lose and the harm the landlord suffered, and whether the tenant can and will cure the default promptly.
A viable business that pays the arrears into court and has otherwise performed has a genuine prospect. A tenant with a long history of default and no funds does not. What matters most is speed: once the landlord has re-let the premises to someone else, the remedy can become practically impossible no matter how good the argument was on day one.
The indemnity you signed and forgot
Most Ontario commercial lease packages include a personal indemnity or guarantee, signed by the principal alongside the corporate lease. It makes you personally liable for rent over the balance of the term if the corporation fails.
The wording matters more than most people expect. An indemnity and a guarantee operate differently, and an indemnifier's obligations can survive events that would discharge a guarantor, including the tenant corporation's bankruptcy or a disclaimer of the lease. If a landlord is pursuing you personally after the company has gone, that document is where the analysis starts.
If you are the landlord
The same election rules protect you if you follow them and expose you if you do not. Decide on the remedy before acting, document the arrears and the notice, and if you terminate and intend to claim the balance of the term, start documenting the re-letting effort immediately. The duty to mitigate is the battleground on those claims, and a landlord who leaves the unit dark for a year will not recover a year of rent.
More on arrears, distress, termination and possession on the commercial lease page.
