Commercial Tenancies: Removing an Overholding Tenant
The rights and remedies that attach to commercial tenancies are generally prescribed by the lease agreement giving rise to the tenancy. There is generally great latitude for parties to negotiate their relations to each other. That said, the Commercial Tenancy Act continues to apply to commercial leases.
The British Columbia Law Institute described the split between the Commercial Tenancy Act and modern leasing practices as “very wide”, as often “irrelevant to the contemporary commercial leasing sector” and described the outdating, technical and often inapplicable language of the Commercial Tenancy Act. For such reasons, it can be difficult for parties in the midst of negotiating commercial leases or who find themselves in a dispute about a commercial lease to understand what rights and remedies might be prescribed by the Commercial Tenancy Act or how to avail themselves of the rights and remedies of the Commercial Tenancy Act.
A recent and relatively simple example of the continuing application of the Commercial Tenancy Act to modern leases can be found in the case of Chew Fidelity Ltd. v Greater Victoria Contracting Services Ltd., 2019 BCSC 1474 (CanLII).
In the case a dispute arose between landlord and tenant which centered around differing allegations as to what lease agreement governed the relationship between the parties. The landlord alleged the existence of a six-month lease for 3,000 square feet and the tenant alleged a five year plus one-month lease for 10,000 square feet. Depending on the allegation that prevailed, the tenant was either overholding by refusing to give up possession of the leased space – or remained in the midst of its lease term.
Ultimately the court found that the six-month lease was consistent with the circumstances, communications of the parties and other evidence before it and further determined the five-year lease to be a forgery. Based on these findings and the notice given by the landlord to the tenant to vacate the premises, the court further found that the tenant was overholding by being in wrongful possession of the leased premises.
Having made these findings, the court then applied ss. 18 and 21 of the Commercial Tenancy Act, which provide landlords with the ability to apply for and for the court to issue an order for a landlord to regain possession of a premises where a lease has expired and a tenant wrongfully refuses a written demand to give up possession. The court ordered that a writ of possession be issued which gave the landlord the ability to enforce its possession rights.
What is important about the application of ss. 18 and 21 of the Commercial Tenancy Act is the requirements prescribed by legislation which had to be met for the writ to be issued. Those requirements included:
- the landlord providing the court with an affidavit setting out the terms of the lease if oral;
- the landlord providing a copy of the lease to the court if the lease was in writing;
- the landlord explaining why a written copy of the lease cannot be provided if the lease was written and not available and providing the court details of its terms;
- the landlord providing a copy of the written demand that the tenant give up possession to the court, stating the refusal of the tenant to give up possession and the reasons given for such refusal; and
- any other explanation regarding the tenant’s refusal.
Chew Fidelity Ltd. v Greater Victoria Contracting Services Ltd. highlights how, for all its archaic language and confusing structure, the Commercial Tenancy Act continues to affect modern commercial leases.
It is important for parties engaging in commercial leases, both tenants and landlords, to appreciate what rights and remedies are or are not created by their lease and how such rights and remedies might be further affected by the Commercial Tenancy Act. When commercial tenancies are in dispute, important rights and remedies can be lost if certain steps required by the Commercial Tenancy Act are not taken precisely and in a timely fashion. Early legal advice can be key to more positive outcomes.