The previous segment in this series summarized a landlord's options to respond to a tenant's breach of a commercial lease. In addition to considering what option to exercise, it is also important to consider when to exercise it – the focus of this third and penultimate instalment.
Generally, civil claims in Ontario must be filed within two years from the date the claim was discovered. However, there is an exception for reoccurring breaches of contractual obligations, known as a "rolling limitation period". Where there is an ongoing obligation under a commercial lease, a new cause of action arises each time a breach occurs, in effect resetting the limitation period.
Recent case law has emphasized that the question is not whether the non-breaching party continues to suffer a loss or damage; rather, it is whether the breaching party continues to fail to meet its contractual obligations beyond the original breach.
Both commercial landlords and tenants should consider that where a landlord chooses not to cancel a repudiated lease, both parties must continue to perform any obligations under such lease; otherwise, the limitation period will likely keep resetting.
This bulletin is the third part of a four-part series. Access the previous and subsequent instalments below:
- (Part 1) Commercial Leasing & Landlord Remedies:
Verbal Agreements/Offers to Lease
In the event of a breach of a commercial lease, an agreement to lease may be treated as a valid contract.
Read the full article >> - (Part 2) Commercial Leasing & Landlord Remedies:
Landlord's Options in the Event of a Breach
Learn about the four key remedies available to commercial landlords at law, in the face of a tenant's breach.
Read the full article >> - (Part 4) Commercial Leasing & Landlord Remedies:
Mitigation and Damages
A key takeaway from the Highway Properties case – a landlord's duty to mitigate.
Coming soon
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