How does commercial lease assignment work when a business is sold in Nunavut?

This page covers the Commercial Tenancies Act as applied in Nunavut, read from a consolidation headed as current to a date in 2014. The consolidation says it is an office consolidation prepared for convenience only and is not an official statement of the law. Confirm the current text before you rely on it.

Consent to an assignment

A lease covenant against assigning, subletting, parting with possession or disposing of the land without licence or consent carries a deemed proviso under s.11(1) that consent shall not be unreasonably withheld, unless the lease contains an express provision to the contrary. Absent such a provision, the covenant also carries a deemed proviso that no fine or sum in the nature of a fine is payable for the consent, but a reasonable sum for legal or other expense may be required.

When the landlord refuses

Section 11(2), headed as an order of the Nunavut Court of Justice, applies where the landlord refuses or neglects to give a licence or consent to assign or sublet. On the application of the tenant, assignee or subtenant, a judge may determine whether it is unreasonably withheld and, where it is, permit the assignment or sublease, and the order is the equivalent of the landlord’s consent. In the Act, a judge means a judge of the Nunavut Court of Justice. 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.

A tenant’s bankruptcy

Under s.24(1), where 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. Under s.24(3), the assignee, trustee or liquidator may, within three months after the assignment or order and before giving notice of intention to surrender possession or disclaim, elect by written notice to retain the leased premises on the terms of the lease, subject to payment of the rent. On payment to the landlord of all arrears of rent, the assignee, trustee or liquidator may assign the lease to a person who will covenant to observe its terms and agree to conduct on the premises a trade or business not reasonably of a more objectionable or hazardous nature than the debtor’s, and whom a judge, on the application of the assignee, trustee or liquidator, approves as fit and proper. The federal Bankruptcy and Insolvency Act, s.146, makes the rights of lessors in a bankruptcy subject to the priority ranking in section 136.

The Nunavut Personal Property Registry provides access to register and search personal property security notices. For the general process, how landlord consent works in a business purchase is the place to start.