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

This page covers the Yukon Commercial Landlord and Tenant Act, read from the Legislative Counsel Office’s unofficial consolidation, which prints a placeholder where a currency date should be. Confirm the current text before you rely on it. The Act does not apply to a tenancy agreement, rental unit or other residential property to which the Residential Landlord and Tenant Act applies.

Consent to an assignment

Section 11(1) reads a proviso into a lease that has a covenant against assigning, subletting, parting with possession or disposing of the land without licence or consent: unless the lease contains an express provision to the contrary, consent is not to be unreasonably withheld. The same subsection deems a second proviso, again unless the lease contains an express provision to the contrary: no fine is payable for the consent, though a reasonable sum for legal or other expense may be required.

When the landlord refuses

A tenant, assignee or subtenant who is refused, or is simply not answered, can apply to a judge under s.11(2). The judge may decide whether the licence or consent is unreasonably withheld and, if it is so withheld, may permit the assignment or sublease, and the order stands as the landlord’s consent. A licence granted to a tenant extends, unless otherwise expressed, only to the permission actually given, the specific breach referred to or the matter specifically authorized, and does not prevent a proceeding for a later breach unless the licence says otherwise.

Forfeiture, insolvency and searches

Under s.57(9)(a), section 57 does not extend to a covenant or condition against assigning, underletting, parting with possession or disposing of the land leased. Under s.36(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 from the date of the assignment or order, and the assignee, trustee or liquidator may take possession. Federal law adds that, in a bankruptcy, the rights of lessors are subject to the priority ranking in section 136 and to subsection 73(4) and section 84.1, and are determined by the law of the province in which the leased premises are situated. The Yukon Personal Property Registry provides access to register and search personal property security notices.

For the general process, see how landlord consent to a lease assignment works in a business purchase.