October 15, 2021 | Christianah
Our previous post highlighted essential considerations that tenants should keep in mind before entering into lease agreements. One of these is relocation rights, which is a right that enables a landlord to relocate the tenant to another unit or space, usually within the same location/building. Today’s post will explore this right in more detail, focusing on the need to balance the competing interests of landlords and tenants.
Relocation rights under commercial lease agreements involve a lot of compromise from both the landlord and the tenant. With relocation rights, the landlord can revamp the property to accommodate new and existing tenants and efficiently manage and maintain control of the property. On the other hand, tenants aim to avoid any disruption that would affect their business operations.
From the tenant’s perspective, the relocated property should be of equal size as the original property, with the landlord bearing the direct cost of relocation and installations. The landlord would also want to avoid making exact representations of the characteristics of the relocated property to allow for flexibility in its arrangement.
The length of an agreed notice period is another point in question for the parties. The landlord would want to avoid providing lengthy advance notice so as not to lose the opportunity to create space for new tenants. Conversely, the tenant would wish for adequate advance notice to inform its customers and vendors and make plans to move to the relocated property.
Installation costs are another factor to be considered when examining relocation rights. The tenant would not want to bear the cost of installments in the relocated property, so it needs to be clearly stated who would be responsible for the cost of these improvements.
There are various deliberations to be weighed when providing for a landlord’s relocation rights under lease agreements. Therefore, there needs to be a balance of interests in drafting these rights and clarity in delineating responsibilities and duties under it.
For any questions or advice on drafting or confirming your rights under a lease agreement, please don’t hesitate to contact Northview Law at 905-857-4890 or follow this link to book a free consultation.