Canadian Lawyer

w w w . C A N A D I A N L a w y e r m a g . c o m A u g u s t 2 0 1 4 21 rEaL EstatE Practise avoidance l ike many relationships, the one between a commercial landlord and tenant could come to a much happier, simpler conclusion if pre- cautions are taken beforehand. When a commercial lease is at an end, the tenant can still be liable to the landlord for damages. If the landlord isn't satisfied with the state of repair of the property, the relationship could quickly disintegrate. What's key, says Jamie Spotswood, is pay- ing attention to the obligation usually con- tained in commercial leases for the tenant to leave the premises in a good state of repair, which usually allows for an excep- tion for reasonable wear and tear. But it's not always so straightforward. Spotswood refers to the roof of a leased building that needs replacing just as the tenant's term comes to an end as an example of where interpretations of wear and tear could differ. "It is up for debate whether a tenant should be at least partly responsible for the cost of replacing the roof (that comes to the end of its life toward the end of the term of a lease). If however, the tenant leaves the roof unrepaired or makes inadequate repairs to the roof during the course of the tenancy, which result in further damage to the property, the cost of repairing the damages will be for the tenant's account in most cases," says Spotswood, who practises commercial real estate law with Lenczner Slaght Royce Smith Griffin LLP. "The impor- tant thing is to make sure when the lease expires there's communication between the landlord and tenant. It's good for the landlord to have a look before . . . and alert the tenant to any problems." The terms of the lease and the intended use of the property are the starting points for the standards that apply, he adds. The Ontario Court of Appeal referred to the following wording, in part, within the lease when coming to a conclusion in 2004's Stellarbridge Management Inc. v. Magna International Canada Inc.: "The manner in which the demised premises shall be maintained shall be at the sole discretion of the lessor provided that the said manner shall be reasonable and in keeping with the maintenance of a first class industrial building having regard for the then age of the building." The landlord's argument that the tenant was obliged to return the leased premises at the end of the term to a brand new, pristine industrial building was Most commercial landlord-tenant disputes that arise at the end of a relationship can be avoided with planning and taking precautions when the lease is first signed. by Marg. bruineMan Pete RyaN

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