What an Ontario commercial lease agreement is for
Ontario regulates residential tenancies in detail, with a mandatory standard lease and a tribunal. Commercial tenancies are almost entirely a matter of contract, backed by the Commercial Tenancies Act, a statute that dates back more than a century. That Act gives landlords remedies that surprise many tenants: once rent is 15 days late, a landlord can change the locks without going to court, and it can seize and sell the tenant's goods for unpaid rent. It also gives tenants protections, such as relief from forfeiture, and it says consent to an assignment cannot be unreasonably withheld unless the lease says otherwise. What the lease says, and how carefully it says it, decides almost everything else.
This template is a full Ontario commercial lease. It covers basic terms, a fixturing period, Planning Act compliance, basic rent and HST, carefree net or semi-gross additional rent with exclusions and an audit right, use, utilities, HVAC, repairs, alterations and Construction Act liens, signs, insurance, indemnities, damage, transfers, default and remedies, an indemnifier, registration, holding over, and a renewal at fair market rent. Schedules provide the plan, the rent table with HST, landlord's and tenant's work, rules, a checklist and notice addresses.
When to use it
Use it to lease an office suite, a retail unit in a plaza, a medical or clinic space, or a light industrial or flex unit anywhere in Ontario, for a term of three to ten years. Landlords can use it as a standard form; tenants can use it to see what a balanced lease looks like and to test the landlord's draft against it.
Commercial leases often start with an offer to lease that sets the main business terms; this lease is the full document that follows. It is not intended for shopping centre leases with percentage rent and co-tenancy, ground leases, or residential and mixed-use premises where the Residential Tenancies Act applies to the residential part.
What's inside
The full list of sections and fields in this template, in the order they appear.
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Basic terms and premises
- Property and unit
- Proportionate Share
- Term and Fixturing Period
- Basic and Additional Rent
- Deposit
- Permitted Use
- Renewal
- HST numbers
- Measurement
- Condition
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Term and Planning Act
- Fixturing Period
- Possession delay
- 21-year consent rule
-
Rent
- Monthly Basic Rent
- Payment method
- HST
- Late interest
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Operating Costs and Realty Taxes
- Carefree net or semi-gross
- Operating Costs
- Exclusions
- Administration fee
- Taxes
- Reconciliation
- Audit
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Use, utilities and repairs
- Continuous operation
- Compliance and AODA
- Exclusive use
- Environmental
- Utilities
- HVAC
- Tenant and Landlord repairs
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Alterations, insurance and casualty
- Consent to alterations
- Construction Act holdbacks and liens
- Signs
- Removal
- Tenant and Landlord insurance
- Releases
- Indemnities
- Damage and abatement
-
Transfers and default
- Consent and recapture
- Change of control
- Events of default
- 15-day re-entry
- Section 19 notice
- Distress
- Accelerated rent
- Highway Properties damages
- Relief from forfeiture
-
Indemnifier and general terms
- Indemnity of Tenant's obligations
- Subordination and estoppel
- Notice of lease
- Holding over
- Surrender
- Renewal at fair market rent
- Quiet enjoyment
- Access
-
Schedules A to F
- Plan and legal description
- Basic Rent with HST
- Landlord's and Tenant's Work
- Rules
- Pre-signing checklist
- Addresses for notices
Preview pages
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Page 1 -
Page 2 -
Page 3
How to complete the lease
- Fill in the basic terms. Use names exactly as registered, and enter the unit, area, Proportionate Share, term, fixturing period, deposit, use and renewal.
- Check the Planning Act. Confirm the term plus renewals is under 21 years, or get consent.
- Complete the rent table. Fill in Schedule B with rates, monthly rent and HST, and any rent-free months.
- Choose net or semi-gross. Keep the Operating Cost exclusions and set the administration fee.
- Set use and repair terms. Permitted use, operating hours, any exclusive, and HVAC responsibility.
- Define the work. Landlord's Work, Tenant's Work and any allowance in Schedule C.
- Set insurance limits and the indemnity. Add the indemnifier and decide whether to cap the indemnity.
- Confirm the default terms. Review cure periods and accelerated rent; do not shorten the statutory protections.
- Sign and follow up. Sign with the indemnifier witnessed, collect insurance certificates, and register a notice of lease if the tenant requires it.
Example: a clinic unit in Ottawa
A fictional landlord, Rideau Point Holdings Inc., leases Unit 4 (1,850 square feet) in a 24,000-square-foot plaza in Ottawa to Westboro Physio Inc. for five years from March 1, 2026, with the owner, Dr. Amira Saleh, as indemnifier.
Proportionate Share: 1,850 ÷ 24,000 = 7.71%. Basic Rent, year 1: $26.00 per sq. ft. = $48,100 a year, $4,008.33 a month, plus HST of $521.08. Additional Rent estimate: $14.50 per sq. ft. = $2,235.42 a month, plus HST. Fixturing Period: 60 days, from January 1, 2026. Indemnity: capped at 12 months of Rent. Renewal: one five-year renewal at fair market rent, notice due between March 1 and August 31, 2030.
If rent for June 2027 is unpaid, Rideau Point's right of re-entry arises on June 16, 2027, once rent is 15 days in arrears.
Ontario rules to know
- Re-entry for unpaid rent (Commercial Tenancies Act section 18(2)). Available once rent is 15 days in arrears.
- Notice for other breaches (section 19(2)). Written notice of the breach, a demand to remedy it and a reasonable time to comply, before forfeiture.
- Distress. Seizure of the tenant's goods for unpaid rent, but not after the lease is terminated.
- Relief from forfeiture. Available to tenants under the Act and the Courts of Justice Act.
- Consent to transfers (section 23). Not to be unreasonably withheld unless the lease says otherwise.
- HST. 13% on commercial rent and additional rent.
- Planning Act section 50. Consent needed for leases of part of a lot for 21 years or more, including renewals.
- Construction Act. Liens and 10% holdbacks on the tenant's improvements; the landlord's interest can be affected.
Lease terms that cause Ontario disputes
Most Ontario commercial lease disputes come back to a handful of clauses. An open-ended Operating Cost definition lets a roof replacement or a parking lot rebuild flow through to tenants in one year. A landlord changes the locks after 10 days instead of 15, or after a non-rent breach without the section 19 notice, and ends up paying the tenant's damages. A small tenant's owner signs an unlimited indemnity without reading it and is pursued for years of rent after a bankruptcy. A renewal option has no method for setting the rent, so it fails for uncertainty. The cost exclusions, default sections, indemnity cap and renewal clause here are drafted to avoid those outcomes.
Frequently asked questions
Can a commercial landlord change the locks in Ontario?
Yes. Under section 18(2) of the Commercial Tenancies Act, once rent is at least 15 days in arrears the landlord can re-enter and change the locks without a court order, unless the lease says otherwise. For other breaches, the landlord must first serve a written notice under section 19(2) and give the tenant a reasonable time to fix the problem. A tenant can apply to court for relief from forfeiture.
Is HST charged on commercial rent in Ontario?
Yes. Commercial rent is a taxable supply, so a registered landlord charges 13% HST on basic rent and additional rent. A residential lease is exempt, but a commercial lease is not.
What is a carefree net lease in Ontario?
A lease where the tenant pays its proportionate share of the property's operating costs and realty taxes on top of basic rent, so the landlord receives the basic rent free of property expenses. The definition of operating costs, its exclusions and the administration fee decide how much the tenant actually pays.
What is an indemnifier on a commercial lease?
A person, usually the owner of a small corporate tenant, who guarantees that the tenant will pay the rent and perform the lease. If the tenant defaults or goes bankrupt, the landlord can collect from the indemnifier, often for the whole remaining term unless the indemnity is capped.
Do I need to register a commercial lease in Ontario?
No, but a tenant with a long term, renewal options or significant improvements often registers a notice of lease on title, so a buyer or lender of the property is bound by it. A lease of part of a property for 21 years or more, counting renewals, also needs Planning Act consent.
