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(D) Notwithstanding the fact that a redevelopment encompassing a new retail concept is required to entice more customers to visit a previously declining shopping centre, the landlord is still required to strictly abide by the terms of the lease, which provides that the relocated premises must be "similar in location" to the original premises. In this example, there were no premises left in the redeveloped shopping centre that was "similar in location" to the original premises — being located in the interior part of an enclosed mall between two anchor ten- ants. Therefore, the landlord does not have a choice but to be in breach of its obligation under the relocation clause of the lease. However, on a practical basis, if the tenant were relocated to an area of the mall that would have generated more traffic and sales, then it would have no reason to complain and would prob- ably not bring a suit against the landlord for damages. 1 2 (B) At common law, the termination of a head lease (for example, due to the non-payment of rent by a head tenant) would result in the termination of any subleases. However, if the head landlord and the head tenant agree to a surrender of the head lease, the head landlord would become bound by any sublease. This common law rule has been codi- fied into statute in many provinces (see for example, section 17 of the Commercial Tenancies Act (Ontario)). In fact, in Alberta, the registered owner of a sublease must first consent before a head lease is surrendered. It is also important to note that in most provinces, in the event a head lease is terminated by the landlord, any subtenant may apply to court to have the sublease made binding on the landlord, in which case the subtenant may be required to be bound by the terms of the head lease as head tenant, including becoming the tenant for the entire premises under the head lease. (B) In a typical lease for a commercial retail unit (CRU), the premises being leased by the tenant comprises the area from the top surface of the structural subfloor to the bottom surface of the structural ceiling. The roof of the premises itself is typically considered part of the common areas, which are controlled by the landlord. If the roof is controlled by the landlord, then the landlord would be able to install solar panels on the roof of such buildings, and in many cases, enter into a lease for the roof with the solar panel provider. Contrast this to a situation where the tenant has entered into a lease for the entire building or has entered into a ground lease, in which case the tenant controls the roof of the building. This would arguably not allow the landlord to install solar panels on the roof of the building. 3 A DAILY BLOG [ (C) In multi-use developments, it is common for leases to provide that the operating costs and taxes with respect to one type of use within one area of the building are not shared with the operating costs and taxes with respect to another "component" of the building. It would depend on the language found in the lease to determine whether a retail tenant can benefit from the operating cost savings that tenants in the office premises enjoy. When entering into a lease for such a multi-use development, (for example, a retail premises on the ground floor of a residential condominium building) a tenant must turn its mind to the setup of the development and determine whether operat- ing costs and taxes are shared between the two portions of the development, or whether they are kept separate. 4 (A) Since the termination clause specifically provided that the termination clause may be triggered in the event of a redevelopment of "all or any part" of the shopping centre, then the principles of the interpretation of commercial contracts would allow the landlord to terminate the lease even though the redevelopment of the shopping centre did not affect the jewelry store. In this case, nothing more is necessary for the landlord to act on its strict rights under the termination clause. 5 YOUR RANKING? One or less correct: might be time to brush up Two correct: not bad, but some further work needed Three or four correct: very well done, but not perfect Five correct: excellent OF CANADIAN LEGAL NEWS WWW.CANADIANLAWYERMAG.COM/LEGALFEEDS ] CANADIAN LAWYER & LAW TIMES POWERED BY 16 • AUGUST/SEPTEMBER 2012 WWW.CANADIANLAWYERMAG.COM/INHOUSE INHOUSE

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