Commercial Leasing Bulletin: 2020/2021 Leasing Case Update

• Published date: 31 March 2022
• Subject Matter: Real Estate and Construction, Landlord & Tenant - Leases
• Law Firm: Minden Gross LLP
• Author: Commercial Leasing Group

Our leasing update last March "Looking Back at 2020" and many of our subsequent bulletins focused heavily on COVID-related cases. Last week we entered into a new phase of the pandemic with the lifting of the mask mandate. We are celebrating this new chapter with a recap of some noteworthy cases from 2020/2021 which are not COVID-related and where the results may surprise landlords and tenants.

Implied term that the premises comply with code requirements

In Transport Canpar LP v. 3258042 Nova Scotia Limited, 2020 NSSC 274 (NSSC), a Landlord purchased a building on an as-is basis without a building inspection. The Landlord later leased the building to the Tenant. During a time of unusually heavy snow in Nova Scotia, the roof of the building collapsed. The Tenant brought an action seeking damages for breach of lease and/or negligence. After careful review of the evidence and engineering reports, it was determined that the load-carrying capacity of the roof was significantly lower than that prescribed by the National Building Code.

Although the lease did not contain any Landlord representations and warranties about the condition of the premises, the Tenant argued that there was an implied term in the lease that the premises would be reasonably fit for occupation. The lease contained numerous references requiring building approvals from various governmental authorities for any work undertaken by the parties, such as the requirement that all alterations comply with the building code. The Court found that if the parties required alterations and repairs to comply with the building code, they would have assumed at the outset that the premises complied with the building code. As a result, the Court found that the lease contained an implied term that the building was designed and constructed in accordance with the National Building Code.

Landlords beware - the absence of representations and warranties with respect to the condition of leased premises may not preclude a landlord from liability if the premises are not in compliance with applicable laws.

Intent is important in lease repudiation

A tenant's right to quiet enjoyment is one of the most basic tenant rights. As a result, a landlord who changes the locks and takes possession of leased premises is generally found to have terminated a lease. While a landlord may not intend to terminate the lease by changing the locks, the landlord's intention is not usually relevant and its remedies will be limited regardless.

In...