Updated October 3, 2026 · DF Property Management
A different rulebook
The Residential Tenancies Act and the Landlord and Tenant Board don't apply to commercial premises. Commercial tenancies are governed by the lease, the Commercial Tenancies Act (CTA) and the common law, and disputes go to the Superior Court of Justice. There's no N4 and no Board hearing before a landlord acts — but there are rules, and a misstep can expose the landlord to damages.
The 15-day rule for unpaid rent
Under section 18 of the CTA, every commercial lease is deemed to allow the landlord to re-enter if rent remains unpaid for 15 days after it was due, even without a formal demand. Many leases shorten or lengthen this period or add a notice requirement; where the lease is more generous to the tenant, follow the lease.
Once the period has passed, the landlord generally has two main routes for unpaid rent — and they pull in opposite directions.
Route 1: distress (keep the tenancy alive)
Distress lets the landlord seize the tenant's goods on the premises and sell them to pay the arrears, while the lease continues. It's an old remedy, still available in Ontario, and normally carried out through a bailiff. Key limits in the CTA:
- Only goods on the premises can be distrained, subject to the fraudulent-removal provisions.
- As a rule, only goods of the tenant (or a person liable for the rent) — not goods belonging to third parties, such as leased equipment or a supplier's consigned stock.
- Distress must be reasonable — proportionate to the arrears.
- Goods can't be sold until five days after the distress and notice, and must be appraised before sale.
- Distress is for rent. It is not available for other kinds of breach.
Distress is useful when the tenant's business is worth keeping and its equipment has real value. It's poor value when the goods are worth little, are financed, or belong to someone else.
Route 2: termination and re-entry (end the tenancy)
The landlord can terminate the lease and retake possession — in practice, by having a bailiff or locksmith change the locks outside business hours and posting a notice of termination on the door. After that, the landlord can claim the arrears and, if the lease and the law allow, damages for loss of future rent.
You generally can't do both
Distress assumes the lease continues; termination ends it. Once a landlord terminates, it generally loses the right to distrain (the CTA allows limited distress after a lease ends, within six months and only while the tenant is still in possession). And if you distrain first, you have affirmed the lease. Choose one route deliberately, ideally with your lawyer.
Non-rent breaches: the section 19 notice
For breaches other than non-payment of rent — no insurance certificate, an unapproved use, unauthorized alterations, failure to repair — section 19 of the CTA requires the landlord to serve a notice before re-entering. The notice must:
- Specify the breach. Identify the covenant broken and what happened.
- Require it to be remedied, if it can be remedied.
- Require compensation in money for the breach.
- Allow a reasonable time. The landlord can act only if the tenant fails to remedy and compensate within a reasonable time afterwards.
A defective notice is the most common reason a re-entry is later overturned.
Waiver — the trap after the lock change
Accepting rent or otherwise treating the lease as continuing, with knowledge of the breach, can waive the landlord's right to terminate for that breach. Common ways landlords accidentally waive:
- Cashing a post-dated cheque or accepting an e-transfer after termination.
- Letting the pre-authorized debit run for the next month.
- Sending a routine invoice for next month's rent or CAM.
Section 26 of the CTA limits a waiver to the particular breach it relates to, and many leases contain a non-waiver clause — but neither is a reliable shield. Stop automated collection before you act, and get advice before accepting any money afterwards.
Relief from forfeiture
A tenant can ask the Superior Court for relief from forfeiture under section 20 of the CTA, and courts have broad discretion to reinstate a lease on terms. If the lease was terminated for unpaid rent and the tenant pays all arrears and costs into court before judgment, the proceeding is stayed. Practically, this means a tenant with money can often get back in — so plan for that possibility before changing the locks.
Deposits, guarantees and insolvency
Most commercial leases include a security deposit, and many include a personal guarantee or indemnity from the business owner. Read both before choosing a remedy: some guarantees require notice to the guarantor within a set time, and the lease may say how a deposit can be applied. If the tenant files for bankruptcy or makes a proposal under federal insolvency law, a stay of proceedings generally stops the landlord's remedies and limits its claim. Call your lawyer the day you hear about it.
A practical sequence
- Day 1–5 of the arrears. Contact the tenant in writing. Many defaults are cash-flow problems that a short payment plan resolves.
- Review the lease. Default clauses, notice requirements, cure periods, indemnifier and security deposit.
- Check the guarantee. If there's a personal guarantor or indemnifier, notify them as the lease or guarantee requires.
- Pick the remedy. Distress, termination, or a negotiated surrender — with your lawyer, before anyone visits the unit.
- Execute cleanly. Use a licensed bailiff, document the premises with photos and an inventory, stop automated payments, secure the space.
- Re-let and mitigate. Start marketing immediately. A landlord claiming damages is expected to take reasonable steps to re-lease.
Mixed-use buildings
If the shop has an apartment above it, be careful: commercial remedies apply only to the commercial premises. The residential unit remains under the Residential Tenancies Act unless the business and living space are occupied by the same person under a single lease and the business use predominates. Changing the locks on an apartment is unlawful. See mixed-use building management.
Where we fit
Under our commercial property management service we track arrears from day one, keep lease abstracts with every default and notice clause, document the premises and coordinate with your lawyer and bailiff. We don't give legal advice, but we make sure your lawyer has a complete file the day you need it. Related: commercial lease types.
General information, not legal or tax advice. Commercial remedies are technical; speak to an Ontario lawyer before distraining, terminating or re-entering.