What to Do If You Did Not Sign a Commercial Lease Agreement: Guidance for Ontario Business Tenants

It is more common than many business owners realize to occupy commercial premises without having signed a formal lease agreement. This can happen when a landlord delays providing the lease, when negotiations drag on while the tenant moves in, or when both parties rely on informal arrangements to get the business operational quickly.

If you are operating from a commercial space in Ontario without a signed lease, it is important to understand your legal position and take steps to protect your business.

While you may still have certain rights, the lack of a written lease creates uncertainty that can expose you to financial and operational risk.

Why a Written Commercial Lease Matters

A commercial lease agreement is a legally binding contract that sets out the rights and obligations of both landlord and tenant. It typically addresses key issues such as:

• Rent and payment terms

• Lease term and renewal rights

• Rent increases

• Maintenance and repair obligations

• Assignment and subleasing

• Termination and notice requirements

The lease serves as the primary reference point if disagreements arise. Without it, there is often no clear record of what was agreed to, making disputes more difficult to resolve.

What Your Legal Status May Be Without a Signed Lease

In Ontario, occupying a commercial property without a signed lease does not automatically mean you have no legal protections.

If you are paying rent and occupying the premises with the landlord’s knowledge and consent, the law may recognize an implied or verbal commercial tenancy. This means that a contractual relationship may exist even without a written document.

However, implied or verbal leases are far less predictable than written agreements. The specific terms can be difficult to prove and may be disputed by the landlord if a disagreement arises.

Risks of Operating Without a Written Lease

Without a signed commercial lease, tenants often face significant uncertainty, including:

• Unclear rent increase rights

• No defined lease term or renewal protection

• Limited notice requirements for termination

• Disputes over maintenance and repairs

• Difficulty enforcing occupancy rights

For example, a landlord may attempt to raise rent unexpectedly or terminate the tenancy with little notice. Without a written lease, the tenant may struggle to establish what protections apply.

Verbal or Implied Leases Are Hard to Enforce

While verbal or implied leases can exist, enforcing them is challenging. Courts and arbitrators rely on evidence such as payment records, emails, conduct of the parties, and industry norms.

If each party has a different understanding of the agreement, outcomes become uncertain and disputes more costly. This unpredictability puts the tenant at a disadvantage.

Why Early Legal Advice Is Important

If you are operating without a signed lease, delaying action increases risk. The longer the tenancy continues without documentation, the more leverage the landlord may gain.

Early legal advice helps clarify:

• Whether an implied lease likely exists

• What terms may be enforceable

• What notice rights apply

• How to reduce exposure moving forward

Understanding your position early allows you to act strategically rather than react under pressure.

How a Lawyer Can Help Protect Your Tenancy

A commercial lease lawyer can assist by:

• Assessing your current tenancy status

• Reviewing communications and payment history

• Advising on your rights and obligations

• Negotiating a written lease with the landlord

• Drafting or revising lease terms to protect your business

• Helping avoid disputes before escalation

In many cases, legal involvement leads to a properly documented lease that reflects the realities of the tenancy and reduces future risk.

Transitioning From an Informal Arrangement to a Written Lease

Moving from an unsigned or informal arrangement to a written lease is one of the most effective ways to protect your business.

A written lease provides certainty, strengthens your negotiating position, and creates a stable foundation for long-term operations. It also makes it easier to plan financially and avoid unexpected disruptions.

Do Not Assume Silence Means Security

Some tenants assume that because the landlord has not raised concerns, the arrangement is safe. In reality, silence offers no protection.

Without a written lease, your tenancy may be more vulnerable than you realize, particularly if circumstances change or the property is sold.

Book a Consultation

If you are occupying a commercial space in Ontario without having signed a lease agreement, you can Book a Consultation to review your situation and discuss how to protect your tenancy.

Early legal guidance can help reduce uncertainty, clarify your rights, and put proper documentation in place before issues arise.