How does commercial lease assignment work when a business is sold in the Northwest Territories?

The text read for this page is an office consolidation of the Northwest Territories Commercial Tenancies Act, prepared by the Legislation Division of the Department of Justice as a convenience, and the consolidation says it is not an official statement of the law. Confirm the current text before you rely on it.

Consent to an assignment

Where a lease contains a covenant, condition or agreement against assigning, subletting, parting with possession or disposing of the land without licence or consent, s.11(1) attaches conditions to it unless the lease contains an express provision to the contrary. Consent shall not be unreasonably withheld, and no fine or sum in the nature of a fine is payable for it, but the landlord is not precluded from requiring a reasonable sum for legal or other expense incurred in relation to the consent.

When the landlord refuses

Section 11(2) applies only if the landlord refuses or neglects to give a licence or consent to assign or sublet. A judge of the Supreme Court may then determine, on application, whether it is unreasonably withheld, and where it is, may permit the assignment or sublease to be made as the equivalent of the landlord’s consent. Section 44(3)(a) says section 45 does not extend to a covenant or condition against assigning, underletting, parting with possession or disposing of the land leased.

The landlord’s claim on a tenant’s goods

Under s.23(1), no goods or chattels other than those belonging to the tenant may be seized under a distress for rent, subject to the exceptions in s.23(2). Paragraph (a) of that subsection lists among the exceptions goods claimed by a person other than the tenant by virtue of any purchase, gift, transfer or assignment from the tenant. Under s.24(1), if an assignment for the general benefit of creditors, a winding-up order or a receiving order in bankruptcy or authorized assignment is made against or by a tenant, the landlord’s right to distrain ceases on the date of the assignment or order. In a bankruptcy, the federal Act makes the rights of lessors subject to the priority ranking in section 136.

The Northwest Territories Personal Property Registry also provides a search capability to find and print records in the registry. For the general picture, read what happens to the commercial lease when you buy a business. BDC says it is always best to have a lawyer, preferably one specializing in commercial real estate, review a lease agreement.