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Sukhi Hansra October 12, 2026
It is usually the largest and longest commitment the business will make. A five-year lease with a personal guarantee is a six-figure obligation that follows you personally if the business closes.
And unlike a residential tenancy, almost nothing in it is protected by default. Ontario’s own guidance is blunt on this point: a signed commercial lease agreement with your landlord or tenant may take precedence over the Commercial Tenancies Act, and the Act does not regulate rent increases. The lease is the law between you and your landlord. If it is one-sided, that is simply the deal.
We review and negotiate commercial leases for business tenants — before signing, while there is still something to negotiate.
Business owners and franchisees taking commercial space in Toronto and across Ontario: retail units, offices, clinics, studios, restaurants, light industrial and warehouse space.
We act for tenants. That is a deliberate choice. Landlords have counsel and a standard form they have used a hundred times; most tenants are seeing it for the first time and have no idea which parts are genuinely negotiable. Nearly all of it is.
These are the provisions that decide whether a lease is survivable. Most are negotiable, and most tenants never raise them:
| Clause | Why it matters |
|---|---|
| Personal guarantee | Whether it is capped, whether it burns off after a period of good payment, and whether your spouse is being asked to sign |
| Term and renewal | Whether the renewal is a real option or just an agreement to negotiate later, and what sets the renewal rent |
| Assignment and change of control | Whether you can transfer the lease when you sell the business, and whether selling your shares silently triggers a default |
| Additional rent | What is included in operating costs, whether management fees are layered on, and whether you can audit the landlord’s numbers |
| Demolition and relocation | Whether the landlord can end your lease early, and what you get if they do |
| Use and exclusivity | Whether you are permitted to operate your actual business, and whether a competitor can open next door |
| Fixturing and allowance | Whether you pay rent while building out, and what the landlord contributes |
| Restoration | What you must strip out and restore at the end, which is a cost that arrives when the business can least afford it |
You can do the first pass yourself. Open the landlord’s draft and search it for each of the eight items above. Two things tell you something immediately. If a clause is missing entirely, that silence usually favours the landlord rather than you, and it is easier to add a term now than to argue about it in year three. And if the personal guarantee has no cap and no end date, that single clause is likely the largest financial commitment in the document, whatever the rent says.
The assignment clause deserves particular attention. If the lease cannot be transferred on reasonable terms, it can quietly stop you selling the business later — the buyer needs the space, and the landlord knows it. That is worth reading alongside buying or selling a business.
If you are opening a franchise, the lease is not a standalone document.
The lease term has to line up with the franchise term, or you can end up franchised with nowhere to operate, or holding space with no right to run the brand. The franchisor will often want a conditional assignment so it can step into the lease if the franchise ends, which the landlord has to agree to. And you may be giving a personal guarantee to the landlord and a separate one to the franchisor for the same location.
These documents are usually negotiated by different people at different times, and nobody is checking that they agree with each other. We do that, because franchise law is core work here rather than something adjacent.
We are a business and franchise law firm, not a real estate department. We do not act on property purchases and sales, development or construction projects, financing secured on land, or residential tenancies.
If your matter is one of those, say so early and we will point you to someone who does it properly rather than learning on your file.
The best time to get a lease looked at is when you have the landlord’s draft and have not yet committed. The second best is before you sign a renewal. After signing, the options narrow considerably — usually to what the lease already permits.
Schedule a complimentary discovery call with our firm to have your lease reviewed, or reach the office at 416-580-0345.
This page is general legal information, not advice about your lease. Commercial leases vary enormously and the right answer depends on your specific document and circumstances.
Reviewed by Sukhi Hansra, Business and Franchise Lawyer at Hansra Law.
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