(Ontario Real Estate Source)
By Brian Madigan LL.B.
Let’s assume that the Landlord leases a convenience store to a tenant. Three months later the Landlord leases space a strip club. Traffic to the plaza drops significantly and no one wants to be seen there in the daytime.
Can a convenience store owner break a lease and sue the landlord for damages?
The answer here is not an easy one. There are essentially three options in terms of remedies:
1) remedies in contract,
2) remedies in tort, and
3) remedies in real property law.
The contract in this case is the lease, the offer to lease and any other documents signed in connection with the transaction.
Those documents should outline the remedy. If they don’t, then that is a serious problem.
Tort remedies are available in respect to misrepresentations made by or on behalf of the landlord in order to induce the tenant to enter into the lease etc.
Innocent misrepresentations are not actionable; fraudulent and negligent misrepresentations are.
So, there is possibly some relief here for something which amounted to an “alteration of plans” or a “change in the use”.
However, the court will look at the materiality of the alteration or change in determining liability not the effect upon the tenant, drastic or otherwise. Liability depends upon the activities of the landlord, not the impact upon the tenant.”
Assuming that there was a material change, then there are remedies available in contract, tort and real property law.
At common law, the Landlord cannot “derogate from the grant”, or create a nuisance which interferes with the ability of the Tenant to enjoy “quiet possession” of the property.
The first place to look is the Lease. It could specifically authorize such a change in use. This might be objectionable, but nevertheless that might be what the Lease says. There are circumstances where strip clubs and churches are in close proximity.
The next step is to look at remedies in tort. Are they precluded by the Lease. And, finally the real property issues.
The Supreme Court of Canada has ruled that a plaintiff may combine several causes of action into one lawsuit, and need only select the appropriate claim at the conclusion of the case.
Brian Madigan LL.B., Broker is an author and commentator on real estate matters, if you are interested in residential or commercial properties in Mississauga, Toronto or the GTA, you may contact him through Royal LePage Innovators Realty, Brokerage 905-796-8888
www.OntarioRealEstateSource.com
