Commercial tenancies are not residential tenancies. There is no tribunal, there is no automatic stay, and a landlord can change the locks without ever seeing a judge.
Commercial leases in Ontario are governed by the Commercial Tenancies Act and by ordinary contract law, and disputes run through the courts rather than the Landlord and Tenant Board. The remedies are faster and blunter than most business owners expect, on both sides.
Landlord Remedies, and the Election Trap
- Distress. Seize and sell the tenant's goods on the premises to recover arrears.
- Termination and re-entry. End the lease and take back possession.
- Damages. Sue for arrears and for the rent owing over the balance of the term.
- Possession. Apply to the court where re-entry is contested.
The trap is that these remedies are largely inconsistent with each other. Distraining for rent affirms the lease, which is incompatible with having terminated it. Doing two things at once, or the wrong thing first, can forfeit the remedy you actually wanted and hand the tenant a damages claim. This is a decision to take advice on before acting, not after.
If You Are the Commercial Tenant and the Locks Have Changed
It may be lawful. A commercial landlord can generally re-enter for non-payment of rent without a court order, subject to the lease and the Act. But not every lockout is valid, and the questions worth asking immediately are whether rent was genuinely in arrears, whether the landlord waived the default by accepting rent, whether notice required by the lease was given, and whether the landlord had already elected an inconsistent remedy.
Where the re-entry was valid, the route back is relief from forfeiture: a court order restoring the lease. Courts weigh the seriousness of the breach, the disparity between what the tenant loses and the harm caused, and whether the tenant can and will cure the default promptly. A viable business that pays the arrears into court has a genuine prospect. Delay does not: once the landlord has re-let the premises the remedy can become impossible.
The Indemnity You Probably Signed
Most Ontario commercial leases come with a personal indemnity or guarantee, and business owners sign them as part of the package without registering what they mean. They make you personally liable for the rent over the balance of the term if the corporation fails. The distinction matters: an indemnity and a guarantee operate differently, and an indemnifier's obligations can survive events that would discharge a guarantor, including the tenant's bankruptcy or a disclaimer of the lease. If a landlord is coming after you personally, the wording of that document is where the file begins.
Mitigation Is the Real Battleground
A landlord who terminates and claims the balance of the term must give proper notice of that intention and must act reasonably to re-let. A landlord who leaves the unit dark, turns down reasonable replacement tenants, or markets it without enthusiasm will find the claim substantially reduced. Both sides should be documenting the re-letting effort from the day the premises come back.
Related work: recovering and enforcing arrears, construction liens arising from tenant fit-outs, and shareholder disputes where the tenant corporation is itself in conflict.