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Things to know

  • Most office, retail and industrial space in Canada is available only through a commercial lease.
  • Most commercial lease transactions start with a binding offer to lease that sets out the most important business terms; a non-binding letter of intent could also be used for this purpose, although it is less commom.
  • Commercial leases in Canada are typically on a fully net basis, which requires a tenant to pay basic rent plus a proportionate share of the realty taxes, insurance, utility and other maintenance charges for the building.
  • In a retail lease, the tenant may also be required to pay a percentage of its sales as “percentage rent”.

Things to do

Determine your space requirements

  • Leases generally have a term of five or ten years, so consider whether you need expansion or contraction rights or a right of first refusal on other space in the building.

Consider the financial obligations

  • Determine if the entity doing business in Canada has a sufficient net worth to satisfy the lease obligations or if an indemnity from a related company or other security might be necessary.

Find a real estate broker in Canada

  • Consider leveraging your business relationship with your local real estate broker, if any, to see if they have relationships with a broker located in Canada, or consult local advisors for recommendations - a local broker can provide invaluable information on local market conditions and rental rates.
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