Ontario's Commercial Tenancies Act: What It Covers and How It Works

The Commercial Tenancies Act, R.S.O. 1990, c. L.7, is the Ontario statute that sets default rules for non-residential leases. It covers landlord remedies such as re-entry and distress, notice before forfeiture for non-rent breaches, court relief from forfeiture, and consent to assign or sublet. Homes are governed by the Residential Tenancies Act, 2006 instead.

The Commercial Tenancies Act in Ontario shapes almost every lease dispute. It answers when a landlord can change the locks and whether a tenant's equipment can be seized. It also covers what a landlord must do before ending a lease for a non-rent breach, and when a court can restore a terminated lease. This guide walks through the Act section by section for landlords, tenants, guarantors and business buyers, and explains whether a lease can change each rule. Commercial leases are part of Hadri Law's commercial practice.

Current as of October 2026. References are to the Commercial Tenancies Act, R.S.O. 1990, c. L.7 (the "CTA" or "the Act").

What the Commercial Tenancies Act Covers, and What It Does Not

The CTA is a provincial statute that applies to leases of non-residential premises: retail units, offices, industrial space, warehouses, restaurants and similar business premises. The Act defines "tenant" broadly, to include a lessee, occupant, sub-tenant, under-tenant and their assigns and legal representatives (s. 1). Many of the protections and remedies below can therefore reach subtenants and occupants as well as the original tenant.

The Act does not set rent, cap rent increases, assign repair obligations, or dictate most lease terms. Those matters are left to the parties. The CTA supplies default rules plus a smaller set of protections that apply whatever the lease says.

Commercial Tenancies Act vs Residential Tenancies Act

Residential tenancies are governed by a different statute, the Residential Tenancies Act, 2006, and the two regimes work very differently.

Commercial parties therefore have far more freedom, and far less statutory protection, than residential parties. Mixed-use premises, such as a storefront with an apartment above, raise classification questions that depend on the facts.

How the Act and the Lease Interact

The most useful question about any CTA rule is whether the lease can change it. Some provisions apply only "unless otherwise agreed." Others are generally treated as protections that cannot be contracted away.

Commercial leases usually define "rent" broadly, so "additional rent" such as a tenant's share of property taxes, operating costs and insurance is treated as rent. This has statutory consequences. If a charge counts as rent, unpaid amounts may support re-entry under s. 18(1) and distress, rather than only the slower s. 19(2) notice route.

Clause-level drafting is outside the scope of this guide. Our guides cover how these provisions are negotiated in practice: the commercial lease clauses to negotiate before signing and what to look for when reviewing a commercial lease in Ontario.

Landlord Remedies Under the Ontario Commercial Tenancies Act

The CTA gives commercial landlords two self-help remedies, re-entry and distress. It also imposes conditions on forfeiture for breaches other than unpaid rent.

Re-entry for unpaid rent: section 18(1)

Section 18(1) implies a right of re-entry into every lease, oral or written, unless the parties agree otherwise. In the Act's words, if the rent "or any part thereof, remains unpaid for fifteen days after any of the days on which it ought to have been paid, although no formal demand thereof has been made, it is lawful for the landlord at any time thereafter to re-enter into and upon the demised premises or any part thereof."

Three points follow from that wording:

• Fifteen days. The statutory period runs from the date rent was due. Many leases shorten or otherwise vary it, which s. 18(1) permits.
• No formal demand. The Act does not require a demand or notice before re-entering for unpaid rent. A lease may add notice requirements of its own.
• Oral or written leases. The implied right applies whether or not there is a signed lease document.

In practice, re-entry usually means changing the locks and posting a notice at the premises. It generally signals that the landlord is treating the lease as terminated. Termination and distress (seizing goods for rent) are generally treated as inconsistent remedies, so a landlord who has terminated is ordinarily no longer able to distrain under the lease. The choice of remedy therefore affects the remedies that remain.

Non-rent breaches: the section 19(2) notice

Other breaches follow a different rule. Examples include an unauthorized use, a failure to insure, a failure to repair, or an unapproved alteration. Under s. 19(2), a right of re-entry or forfeiture for breach of a covenant or condition in the lease is not enforceable "by action, entry, or otherwise" unless:

1. the landlord serves a notice that specifies the breach, requires a remedy if one is possible, and requires money compensation for it; and
2. the tenant fails, within a reasonable time after the notice, to remedy the breach and pay compensation.

A notice that misdescribes the breach, omits a required element, or allows too little time can leave a forfeiture open to challenge. What counts as a "reasonable time" depends on the nature of the breach and what it takes to cure it.

The notice rule is sometimes wrongly attributed to s. 18, which deals only with re-entry for unpaid rent and contains no notice requirement. Section 19(2) is generally treated as a protection the parties cannot contract out of, although the case law leaves some room for doubt.

Distress: sections 30 to 57

Distress (also called distraint) is the landlord's right to seize a tenant's goods on the premises and sell them to pay rent arrears. The rules are spread across ss. 30 to 57 of the Act. It lets the landlord recover arrears while the lease continues.

The Act and the case law limit distress in several ways:

Limits of distress at a glance

• Rent arrears only. Distress is a remedy for unpaid rent, not for other breaches.
• Generally no forced entry. The Act authorizes breaking open a locked place only in the fraudulent-removal situation covered by s. 49.
• Reasonable only. Distress "shall be reasonable" (s. 43), and a landlord who takes an excessive or wrongful distress is liable in damages to the owner of the goods (s. 55(1)).
• Third-party goods. A landlord generally cannot distrain the goods of anyone other than the tenant or the person liable for the rent (s. 31(2)). The Act lists exceptions, including goods claimed by the tenant's spouse, children, in-laws or other relatives living on the premises as part of the tenant's family, and goods whose title comes from the tenant.
• Exempt goods. Goods exempt from seizure under execution are not liable to distress, except as the Act provides (s. 30(1)). A tenant in default for non-payment of rent loses that exemption unless it gives up possession (s. 33(1)), and a landlord that wants to seize exempt goods must serve a notice (s. 34(1)).
• Notice, waiting period and appraisal. The tenant or owner has five days after the distress and notice to replevy the goods. After that, the goods must be appraised by two sworn appraisers and may then be sold for "the best price that can be got" (s. 53).
• Surplus. Any surplus after the rent and the charges of the distress, appraisement and sale must be paid to the owner of the goods on demand (s. 53).
• After the lease ends. Distress after the lease has ended is permitted only within six months, and only while the landlord's title and the tenant's possession continue (s. 41).

A subtenant can shield its goods from distress for the head tenant's arrears by serving a statutory declaration with an inventory and paying the landlord any rent the subtenant owes the head tenant (s. 32(2)). Where a tenant fraudulently removes goods to avoid distress, ss. 48 to 50 give the landlord thirty days to follow and seize them and make those involved liable to pay double the value of the goods.

A seizure can expose the landlord to damages if it is wrongful, excessive or irregular (ss. 54 and 55). A wrongful seizure might be one made outside the s. 41 window or for rent that is not owing. An irregular one is one where the statutory steps were not followed, although an irregularity alone does not make the distress itself unlawful (s. 54). Bailiffs who carry out seizures are licensed under the separate Bailiffs Act. Distress is also limited or stayed when a tenant enters bankruptcy or a restructuring under federal insolvency law.

Commercial Tenancies Act Relief from Forfeiture: Section 20

Forfeiture can cost a tenant its premises, its leasehold improvements and the goodwill of its location. Section 20 lets a tenant apply to the Superior Court of Justice for relief where a landlord is proceeding to enforce a right of re-entry or forfeiture, whether for non-payment of rent or for other cause (s. 20(1)). The court may grant relief as, "having regard to the proceeding and conduct of the parties under section 19 and to all the other circumstances, the court thinks fit," and on such terms as it considers just.

The court also has a general power under the Courts of Justice Act, s. 98, to grant relief against penalties and forfeitures on such terms as are considered just, as well as an inherent equitable jurisdiction. Tenants often rely on both.

Several features of relief from forfeiture are well established:

• Discretion. Relief is equitable and discretionary. Under the test from Saskatchewan River Bungalows Ltd. v. Maritime Life Assurance Co., courts consider the applicant's conduct, the gravity of the breach, and the disparity between the value of the property forfeited and the damage caused by the breach.
• Payment of arrears. Where the proceeding is to enforce a forfeiture for non-payment of rent and the tenant pays into court all the rent in arrear and the costs of the proceeding at any time before judgment, the proceeding is "forever stayed" (s. 20(4)).
• Insurance. Where the breach is a failure to insure, relief is not granted unless insurance is in place at the time of the application, or is put in place as a term of relief (s. 20(8)).
• Exceptions. Section 20 does not extend to a covenant or condition against assigning, underletting or parting with possession, or to a forfeiture condition triggered by the tenant's bankruptcy, an assignment for the benefit of creditors, or execution against the tenant's interest (s. 20(7)(a)).

Relief from forfeiture restores the lease on terms. Where relief is granted, the tenant holds the premises "according to the lease thereof made without any new lease" (s. 20(5)). It does not allow a court to rewrite the lease, reduce the rent, or relieve a tenant of obligations it agreed to. In Hudson's Bay Company ULC v. Oxford Properties Retail Holdings II Inc., 2022 ONCA 585, the Court of Appeal for Ontario confirmed that the scope of relief under s. 20 does not stretch to that, including in a pandemic setting. Section 20 applies "despite any stipulation to the contrary" (s. 20(6)), so a lease cannot exclude it.

Consent to Assign or Sublet: Section 23

Most commercial leases prohibit assignment or subletting without the landlord's consent. Section 23(1) provides that where a lease contains such a covenant, consent is not to be unreasonably withheld, unless the lease expressly provides otherwise. Under s. 23(2), where the landlord refuses or neglects to give consent, the tenant, assignee or sub-tenant may apply to a judge of the Superior Court of Justice. The judge may determine whether consent was unreasonably withheld and, if so, permit the assignment or sub-lease.

Two practical points come out of the case law:

• The default can be displaced, but only expressly. A lease that simply requires consent, without more, leaves the statutory standard in place.
• A conditional consent may not be a consent. In Rabin v. 2490918 Ontario Inc., 2023 ONCA 49, the Court of Appeal for Ontario treated a consent conditional on terms the landlord was not entitled to impose as not being a consent to assign. It also held that the lease's consent clause did not waive the protection in s. 23.

Reasonableness depends on the circumstances, such as the proposed assignee's financial standing and intended use. The mechanics of documenting a sublease are covered separately in our guide to commercial subleases.

Holdover and Overholding Tenants

A tenant that stays in possession after its lease expires is "overholding" or "holding over." What happens next is driven mainly by the lease. Most commercial leases contain a holdover clause that converts the tenancy into a monthly tenancy on stated terms, often at a premium rent.

Where the lease is silent, the parties' conduct matters. If the landlord accepts rent after expiry, the common law may treat a periodic tenancy as having arisen. A landlord may also distrain after the lease ends, but only within the six-month s. 41 window described above.

Our guide to renewal clauses in Ontario leases explains how renewal terms work, which often drives holdover disputes.

Tenant Protections Under the Act

The CTA is often described as landlord-friendly, but it does protect tenants. The main protections are the s. 19(2) notice (generally treated as not waivable), relief from forfeiture under s. 20 and Courts of Justice Act s. 98 (not displaceable by the lease, subject to s. 20(7)), and the limits on distress described above. Consent to assign (s. 23(1)) and set-off against rent (s. 35(1)) are default rules that a lease can displace. Section 35(1) provides that "A tenant may set off against the rent due a debt due to the tenant by the landlord."

How a tenant itself can exit a lease early is covered in our guide to breaking a commercial lease in Ontario.

The COVID-Era Part IV: History Only

In 2020, the Protecting Small Business Act, 2020 (S.O. 2020, c. 10) added Part IV (ss. 79 to 87) to the CTA as a temporary COVID-19 measure. It restricted evictions and distress against eligible small business tenants during defined non-enforcement periods. Part IV has since been repealed (S.O. 2020, c. 36, Sched. 5, s. 1(2), in force December 8, 2022). As of October 2026, it provides no protection to commercial tenants, and the ordinary rules described in this guide apply.

Frequently Asked Questions

Can a commercial landlord lock out a tenant in Ontario?

Yes, in defined circumstances. Under s. 18(1) of the Commercial Tenancies Act, a landlord may re-enter once rent has been unpaid for fifteen days, unless the lease provides otherwise. Re-entry typically means changing the locks. For non-rent breaches, a landlord must first serve a s. 19(2) notice and allow a reasonable time to remedy. Unlike residential tenancies, no tribunal order is required.

Does a commercial landlord have to give notice before terminating a lease?

It depends on the breach. For unpaid rent, s. 18(1) does not require a formal demand or notice, although the lease may. For other breaches, s. 19(2) requires a notice that specifies the breach, requires it to be remedied if possible, and requires compensation, followed by a reasonable time to comply. The two rules are often confused.

Can a landlord seize a tenant's goods to pay rent?

Yes, through distress under ss. 30 to 57 of the Act, but only for rent arrears and within strict limits: generally no forced entry, a reasonable seizure only, generally no third-party goods, and notice plus a five-day wait and sworn appraisal before sale. A landlord that has terminated the lease is ordinarily no longer able to distrain under it.

Is the COVID commercial eviction ban still in effect?

No. Part IV of the Commercial Tenancies Act was a temporary 2020 measure for eligible small business tenants and has been repealed. The ordinary rules on re-entry, notice and distress described in this guide now apply.

Sources & Official Resources

Ontario Statutes Cited

1. Commercial Tenancies Act, R.S.O. 1990, c. L.7
2. Residential Tenancies Act, 2006, S.O. 2006, c. 17
3. Courts of Justice Act, R.S.O. 1990, c. C.43, s. 98 (relief against penalties and forfeitures)
4. Bailiffs Act, R.S.O. 1990, c. B.2
5. Execution Act, R.S.O. 1990, c. E.24 (exemptions from seizure)
6. Protecting Small Business Act, 2020, S.O. 2020, c. 10

This article provides general information about Ontario law and is not legal advice. Every situation is different. Speak with a lawyer about your specific circumstances.

Contact Hadri Law

Landlords and tenants face default notices, distress threats, lock changes, forfeitures and refused assignments. Each situation turns on how the Commercial Tenancies Act applies to the lease. Hadri Law was founded by Nassira El Hadri, a corporate and commercial lawyer called to the Law Society of Ontario. The firm advises landlords and tenants on commercial leases from its office at First Canadian Place in Toronto.

Call (437) 974-2374 or book a free consultation. We serve clients in English, French, Spanish and Catalan.