Can I assign my commercial lease in Ontario if it says nothing about assignment?

The Government of Ontario’s guide to renting commercial property says tenants can sublet or assign the lease unless the lease prohibits it. This page covers Ontario’s Commercial Tenancies Act, which does not apply to tenancies and tenancy agreements to which the Residential Tenancies Act, 2006 applies.

When the Act speaks to consent

Section 23(1) applies to a lease made after the 1st day of September, 1911, that contains a covenant, condition or agreement against assigning, underletting, or parting with the possession, or disposing of the land or property leased without licence or consent. In that case the covenant is deemed, unless the lease contains an express provision to the contrary, to be subject to a proviso that the consent is not to be unreasonably withheld. A lease that says nothing about assignment may still carry such a covenant in a clause you did not expect, so a lawyer should read the whole document.

If the landlord refuses or neglects

Under s.23(2), if the landlord refuses or neglects to give a licence or consent to an assignment or sub-lease, a judge of the Superior Court of Justice, on the application of the tenant, assignee or sub-tenant, may decide whether the consent is unreasonably withheld. Where the judge is of opinion that it is unreasonably withheld, the judge may permit the assignment or sub-lease, and the order is the equivalent of the landlord’s consent.

Checks before you rely on an assignment

BDC says to make sure key contracts, such as leases, regulatory agreements and customer contracts, can be assigned to you if necessary. BDC also says it is always best to have a lawyer, preferably one specializing in commercial real estate, review a lease agreement. The Government of Ontario’s guide says the Law Society Referral Service can help landlords and tenants find a lawyer who will provide a free consultation. For the wider process, see how landlord consent works in a business purchase.