What happens when one party fails to comply with a commercial lease?

When one party fails to comply with an obligation set forth in a commercial lease or by law, the other party may have various remedies available, depending on the nature and severity of the breach, the damages suffered, and the provisions of the lease.

In particular, the tenant may be in default if they fail to pay rent or other amounts due, use the premises contrary to their intended purpose, or fail to comply with their obligations regarding maintenance, insurance, or other terms of the lease.

For their part, the landlord may be in default if they fail to fulfill their obligations, particularly those concerning the delivery of the premises, their maintenance, repairs for which they are responsible, or the peaceful enjoyment of the premises.

Depending on the circumstances, the aggrieved party may, in particular:

• Demand performance of the obligation that has not been fulfilled;
• Claim damages for the harm suffered;
• Request termination of the lease when the breach causes serious harm;
• In the case of the tenant, request a reduction in rent when the applicable conditions are met.

Termination of the lease does not, therefore, automatically result from every breach. Article 1863 of the Civil Code of Québec provides, in particular, that serious harm may justify a request for termination.

A commercial lease may also provide for specific procedures in the event of a breach, such as the issuance of a written notice, a deadline to remedy the breach, or certain contractual consequences.

It is therefore important to review the lease terms and applicable legal provisions before taking any action, as the consequences of a breach vary depending on the circumstances.