Commercial Lease Agreement Template Canada

FREE COMMERCIAL LEASE AGREEMENT TEMPLATE CANADA

1. DOCUMENT PREAMBLE & RECITALS

THIS COMMERCIAL LEASE AGREEMENT (the "Agreement") is entered into and made effective as of this [Day] day of [Month], [Year] (the "Effective Date"), by and between:

LANDLORD: [Landlord Legal Name], having its principal place of business or residence at [Landlord Address], including its successors and permitted assigns (hereinafter referred to as the "Landlord"); and

TENANT: [Tenant Legal Name], a corporation incorporated under the laws of [Jurisdiction, e.g., Ontario / Canada], having its principal place of business at [Tenant Address], including its successors and permitted assigns (hereinafter referred to as the "Tenant").

WHEREAS: A. The Landlord is the lawful owner of the real property located at [Street Address, City, Province, Postal Code], including the building and improvements situated thereon (collectively, the "Building"); B. The Landlord desires to lease to the Tenant, and the Tenant desires to lease from the Landlord, the premises located within the Building, subject to the terms, covenants, and conditions hereinafter set forth; and C. The parties intend for this Agreement to constitute a fully binding legal contract governed by the laws of the Province of [Province] and the federal laws of Canada applicable therein.

NOW, THEREFORE, in consideration of the mutual covenants, obligations, and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Landlord and Tenant covenant and agree as follows:

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2. OPERATIONAL DEFINITIONS

For the purposes of this Agreement, the following terms shall have the respective meanings ascribed to them below, and such definitions shall apply equally to the singular and plural forms of the terms defined:

1. "Additional Rent" means all sums of money, other than Base Rent, payable by the Tenant to the Landlord pursuant to this Agreement, including without limitation the Tenant’s Proportionate Share of Operating Costs, realty taxes, utilities, and any other charges or assessments.
2. "Base Rent" means the fixed annual rent payable by the Tenant to the Landlord in equal monthly installments as specified in Section 3.2, exclusive of applicable taxes.
3. "Commencement Date" means [Date, e.g., November 1, 2023], upon which the term of this Agreement shall officially commence and from which all obligations of the Tenant shall accrue.
4. "Common Areas" means those areas and facilities within the Building and property provided and designated by the Landlord for the general non-exclusive use of the Tenant, other tenants, and their respective invitees, including lobbies, hallways, parking lots, sidewalks, and elevators.
5. "Default" means any breach, non-performance, or non-observance by the Tenant of any covenant, term, condition, or obligation contained in this Agreement.
6. "Interest Rate" means the prime commercial lending rate charged by the Landlord’s principal commercial bank in Canada plus [Number, e.g., 4]% per annum, calculated daily and compounded monthly, or the maximum rate permitted by applicable law, whichever is less.
7. "Leased Premises" means that portion of the Building designated for the exclusive use of the Tenant, municipally known as Suite [Suite Number], comprising approximately [Number] square feet of rentable area, as outlined in Schedule "A" attached hereto.
8. "Operating Costs" means the total costs and expenses incurred or borne by the Landlord in the operation, maintenance, management, repair, insurance, and security of the Building and Common Areas, determined in accordance with generally accepted accounting principles (GAAP) consistently applied.
9. "Permitted Use" means the operation of [Specific Business Type, e.g., general corporate office and administrative services] and for no other purpose whatsoever without the prior written consent of the Landlord.
10. "Security Deposit" means the sum of [Dollar Amount] ($[Amount]) deposited by the Tenant with the Landlord as security for the full and faithful performance of every provision of this Agreement.
11. "Term" means the fixed period commencing on the Commencement Date and expiring on [Expiration Date, e.g., October 31, 2028], unless terminated earlier in accordance with the provisions of this Agreement.
12. "Tenant’s Proportionate Share" means the proportion that the rentable area of the Leased Premises ([Number] sq. ft.) bears to the total rentable area of the Building ([Number] sq. ft.), expressed as a percentage, which is agreed to be [Number]%.

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3. SUBSTANTIVE TERMS & OBLIGATIONS

3.1 Grant and Term

The Landlord hereby leases the Leased Premises to the Tenant, and the Tenant hereby takes and leases the Leased Premises from the Landlord, for and during the Term, to be held and used solely for the Permitted Use, subject to the terms and conditions herein.

3.2 Rent and Payment Mechanics

1. Base Rent: The Tenant covenants and agrees to pay to the Landlord Base Rent during the Term in the annual amount of [Dollar Amount] ($[Amount]), payable in equal monthly installments of [Dollar Amount] ($[Amount]) in advance on the first (1st) day of each and every calendar month.
2. Additional Rent: Commencing on the Commencement Date, the Tenant shall pay Additional Rent equal to the Tenant’s Proportionate Share of Operating Costs and realty taxes, billed monthly or annually by the Landlord.
3. Taxes: The Tenant shall pay, when due, all Goods and Services Tax (GST), Harmonized Sales Tax (HST), and any other sales, use, or value-added taxes imposed by federal, provincial, or municipal authorities on the Base Rent, Additional Rent, and other charges payable under this Agreement.
4. Method of Payment: All rent and other payments shall be paid in lawful currency of Canada to the Landlord at the address specified herein or via electronic funds transfer (EFT) as directed by the Landlord in writing, without any deduction, set-off, or abatement whatsoever, except as expressly provided herein.

3.3 Security Deposit

Upon execution of this Agreement, the Tenant shall deposit with the Landlord the Security Deposit. The Landlord may apply all or part of the Security Deposit to cure any Default by the Tenant. If the Landlord applies any portion of the Security Deposit, the Tenant shall, within ten (10) business days of written demand, restore the Security Deposit to its original amount. The Security Deposit, without interest, shall be returned to the Tenant within thirty (30) days following the expiration of the Term and the peaceful surrender of the Leased Premises, provided the Tenant has fully performed all obligations hereunder.

3.4 Use and Occupancy

1. Permitted Use Only: The Tenant shall use and occupy the Leased Premises exclusively for the Permitted Use and shall not permit any nuisance, waste, or unlawful activity to occur therein.
2. Compliance with Laws: The Tenant shall, at its sole cost and expense, promptly comply with all federal, provincial, and municipal laws, statutes, bylaws, regulations, and ordinances, as well as fire and insurance underwriting rules, applicable to the Leased Premises and the Tenant's specific operations.

3.5 Maintenance, Repairs, and Alterations

1. Tenant’s Maintenance Obligations: The Tenant shall, at its sole cost and expense, maintain the interior non-structural elements of the Leased Premises in a clean, sanitary, and good condition, reasonable wear and tear excepted.
2. Landlord’s Maintenance Obligations: The Landlord shall maintain, repair, and replace the structural elements of the Building, the roof, foundation, exterior walls, and the mechanical, electrical, plumbing, and HVAC systems serving the Building and Common Areas.
3. Alterations: The Tenant shall not make any structural alterations, additions, or improvements to the Leased Premises without the prior written consent of the Landlord, which consent shall not be unreasonably withheld. Any approved alterations shall be performed by licensed contractors approved by the Landlord, at the Tenant’s sole expense.

3.6 Insurance and Indemnification

1. Tenant’s Insurance: The Tenant shall, at its own expense, maintain throughout the Term:
   • Commercial General Liability (CGL) insurance with a limit of not less than [Dollar Amount, e.g., $5,000,000] per occurrence, naming the Landlord as an additional insured.
   • All-risks property insurance covering the full replacement cost of the Tenant's trade fixtures, equipment, and contents located within the Leased Premises.
2. Indemnification: The Tenant shall defend, indemnify, and hold harmless the Landlord from and against any and all claims, actions, damages, liabilities, and expenses (including legal fees on a solicitor-and-client basis) arising from the Tenant’s use of the Leased Premises, any breach of this Agreement, or any negligent act or omission of the Tenant, its agents, employees, or invitees.

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4. DEFAULT, TERMINATION, AND REMEDIES

4.1 Events of Default

The occurrence of any of the following shall constitute an immediate Event of Default by the Tenant:

1. Failure of the Tenant to pay Base Rent, Additional Rent, or any other monetary sum when due, continuing for a period of seven (7) business days after written notice from the Landlord.
2. Failure of the Tenant to observe, perform, or keep any other covenant, term, or condition of this Agreement, continuing for a period of thirty (30) business days after written notice from the Landlord specifying the nature of the breach.
3. The making by the Tenant of an assignment for the benefit of creditors, the filing of a petition in bankruptcy, the appointment of a receiver, trustee, or liquidator for all or substantially all of the Tenant's assets, or the initiation of any winding-up or liquidation proceedings under the Bankruptcy and Insolvency Act (Canada) or similar legislation.
4. The abandonment or vacation of the Leased Premises by the Tenant for a consecutive period exceeding fifteen (15) days.

4.2 Landlord’s Remedies

Upon the occurrence of any Event of Default, the Landlord may, at its sole option and without prejudice to any other rights or remedies available at law or in equity, exercise one or more of the following remedies:

1. Termination: Terminate this Agreement and the tenancy hereby created by giving written notice to the Tenant, whereupon the Term shall immediately cease and determine, and the Landlord may re-enter and take possession of the Leased Premises.
2. Re-Entry and Re-Letting: Re-enter the Leased Premises and expel the Tenant, and re-let the Leased Premises on such terms as the Landlord may deem advisable, holding the Tenant liable for any deficiency between the rent hereby reserved and the net proceeds of re-letting.
3. Cure on Behalf of Tenant: Perform any obligation the Tenant has failed to perform, and all costs and expenses incurred by the Landlord in connection therewith, together with interest at the Interest Rate, shall be immediately due and payable by the Tenant as Additional Rent.
4. Collection of Arrears: Recover all past-due rent, damages, legal fees, and administrative costs incurred by the Landlord as a direct result of the Default.

4.3 Late Charges and Interest

If the Tenant fails to pay any installment of Base Rent or Additional Rent within five (5) days of the due date, a late administration charge of [Dollar Amount] ($[Amount]) shall immediately become due. Furthermore, all overdue amounts shall bear interest at the Interest Rate from the date due until paid in full.

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5. BOILERPLATE LEGAL PROVISIONS

5.1 Severability

If any provision of this Agreement is held to be invalid, illegal, or unenforceable by a court or tribunal of competent jurisdiction, such provision shall be severed herefrom, and the remaining provisions of this Agreement shall remain in full force and effect and shall be construed as if this Agreement had been executed without the invalid, illegal, or unenforceable provision.

5.2 Entire Agreement

This Agreement, including any schedules, exhibits, and addenda attached hereto, constitutes the entire agreement between the Landlord and the Tenant pertaining to the subject matter hereof and supersedes all prior agreements, understandings, negotiations, and discussions, whether oral or written. There are no warranties, representations, or other agreements between the parties except as expressly set forth herein.

5.3 Force Majeure

Neither party shall be held liable or responsible to the other for any failure or delay in fulfilling or performing any obligation under this Agreement (excluding the obligation to pay rent and financial sums) when such failure or delay is caused by acts of God, strikes, lockouts, labor disputes, civil commotion, war, terrorism, fire, flood, sabotage, epidemics, government orders, or any other cause beyond the reasonable control of the affected party (a "Force Majeure Event"). The time for performance shall be extended for a period equal to the duration of the Force Majeure Event.

5.4 Governing Law and Attornment

This Agreement shall be construed, interpreted, and governed by the laws of the Province of [Province] and the federal laws of Canada applicable therein. Each party irrevocably attorns and submits to the exclusive jurisdiction of the courts of the Province of [Province] situated in the Judicial District of [District/City] in respect of any legal action or proceeding arising out of or relating to this Agreement.

5.5 Dispute Resolution

Any dispute, controversy, or claim arising out of or relating to this Agreement, including its formation, breach, termination, or validity, shall first be subjected to good-faith mediation between senior executives of both parties. If the dispute is not resolved within thirty (30) days of the commencement of mediation, the dispute shall be submitted to final and binding arbitration in accordance with the commercial arbitration laws of the Province of [Province], before a single mutually agreed-upon arbitrator.

5.6 Notices

Any notice, demand, consent, or other communication required or permitted under this Agreement shall be in writing and shall be delivered personally, sent by pre-paid registered mail, or transmitted by electronic mail (email) to the respective addresses set forth in the preamble or to such other address as a party may designate by notice to the other. Notices delivered personally or by email shall be deemed received upon delivery; notices sent by registered mail shall be deemed received four (4) business days after mailing.

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6. FORMAL EXECUTION BLOCK

IN WITNESS WHEREOF, the parties hereto have executed this Commercial Lease Agreement under seal as of the Effective Date first written above, by their duly authorized officers and signatories.

LANDLORD:

[Landlord Entity Name]

Per: ___________________________________
Name: [Signatory Name]
Title: [Signatory Title, e.g., Authorized Signatory]
Date: __________________________________
I/We have the authority to bind the Corporation.

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TENANT:

[Tenant Entity Name]

Per: ___________________________________
Name: [Signatory Name]
Title: [Signatory Title, e.g., President / CEO]
Date: __________________________________
I/We have the authority to bind the Corporation.