COMMERCIAL LEASES: RENEWAL CLAUSES

Commercial Leases in Quebec often include a renewal clause. A renewal clause in a commercial lease provides an existing tenant with the opportunity to renew his current lease before it expires. The opportunity to exercise a renewal clause in a commercial lease in Quebec is often restricted to 3-12 months before the lease's expiry. If the renewal clause is not exercised within the given time frame, the landlord can put the property back on the market.


Exercising a renewal clause in a commercial lease does not guarantee the renewal of the lease. Renewing a lease by way of a renewal clause is commonly dependant on a renegotiation of the new rental rate and other terms. Therefore, it is prudent to view a renewal clause as a way for an existing tenant to receive preferential treatment over potential new tenants. If both the tenant and the landlord have rational expectations on the current rental rates, the renegotiation process can be over swiftly, and the lease may be renewed. Issues may arise if the tenant considers the newly proposed rent to be too high or if an agreement between them cannot be reached. It is always wise to review a renewal clause when a commercial lease is coming to an end.

At Meditax, our team of experienced lawyers and certified commercial real-estate brokers can help ensure a lease renewal can be completed as effortlessly as possible.

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