Offices in Ottawa and Perth
(613) 722-1500

CONTACT US (613) 722-1500

Must a Commercial Lease be in Writing?

Must a Commercial Lease be in Writing?

By:

Posted April 4, 2019

While oral agreements, whereby the parties agree to benefit each other in some manner, are generally valid, there are circumstances where a written agreement must be in writing to be enforceable, and these include most, but not all, commercial leases.

Statute of Frauds

In Ontario, the Statute of Frauds, R.S.O. 1990, c. S.19, requires that any lease for a term of more than three years, or any lease for a term of less than three years pursuant to which the annual rent payable is less than two-thirds of the annual rental value of the leased premises, must be in writing, signed by both the landlord and the tenant or their agents and lawfully authorized in writing. In other words, there is no requirement for a lease to be in writing if the term of the lease is no more than three years from the making of the lease and the rent payable by the tenant equals to at least two-thirds of the full rental value of the leased premises.

What happens if the landlord grants the tenant an option to extend or renew the lease?

If the original term of a lease is less than three years, but the lease provides that the tenant has an option to extend or renew the lease such that the tenant may continue leasing the premises beyond the date which is three years from entering into the lease, then such lease will be considered by the courts to be a lease with a term of more than three years and which, therefore, must be in writing.

Must an amendment to a lease be in writing?

If the landlord and tenant wish to amend their lease, they may do so by oral agreement only if the original lease was not required by law to be in writing, whether or not the original lease was, in fact, evidenced by a written agreement. However, if the original lease was in writing and contains a clause stating that any amendments must be in writing, then a written amending agreement should be signed.

The importance of a written commercial lease

Although a commercial lease is not always required to be in writing to be enforceable, it is highly recommended to put in writing the terms of a lease agreement in order to avoid misunderstandings, disagreements, and costly litigation later on.

If you require assistance with drafting or reviewing a commercial lease, we would be happy to assist you.

This blog post was written by Marina Abrosimov, a member of the Business Law team.  Marina can be reached at 613-369-0363 or at marina.abrosimov@mannlawyers.com.

More Resources

Blog |
Business Law
By: 

Posted September 25, 2023

This is the second blog addressing the new requirement for private Ontario corporations to maintain a register of individuals with significant control over the corporation[...]
Blog |
Estate Litigation
By: 

Posted September 11, 2023

Losing a loved one is never easy and dealing with the administration of their estate can be a challenging and complex process, no matter the[...]
Blog |
Construction Law
By: 

Posted September 7, 2023

As detailed in another post, Ontario’s Construction Act creates a scheme for the quick resolution of construction disputes via an “interim adjudication”. However, there has[...]
Blog |
Commercial Litigation
By: 

Posted August 29, 2023

Specific performance refers to the Court-ordered remedy that the parties must proceed with completing a real estate transaction. The recent Court of Appeal decision of[...]
Blog |
Estate Litigation
By: 

Posted August 22, 2023

A will is a legal document that outlines a testator’s wishes for the distribution of their property after they die. Section 4(2) of the Succession[...]
Blog |
Business Law
By: 

Posted August 15, 2023

Throughout their small business journey, sole proprietors need to wear a wide variety of hats. On any given day, they can be all at once[...]

Subscribe to Our Newsletter

"*" indicates required fields

Name*
Consent*
This field is for validation purposes and should be left unchanged.