What happens if an Ontario commercial tenant stays past the end of the lease term without a new agreement?

If a commercial tenant stays in possession after the lease term ends without signing a new lease or renewal, this is generally treated as "overholding," and under the Commercial Tenancies Act and general lease principles, the tenancy commonly continues on a month-to-month basis on largely the same terms as the expired lease, unless the lease itself specifically addresses what happens on overholding, which many commercial leases do.

A significant number of commercial leases include their own overholding clause, often imposing a higher, penalty-level rent, sometimes a meaningful multiple of the prior rent, for any period the tenant stays past the term without a new agreement, specifically to discourage tenants from simply drifting past expiry instead of formally renewing or vacating. Where a lease has such a clause, it generally governs over the general month-to-month default.

Landlords can typically end a month-to-month overholding tenancy with proper notice, though the specific process depends on the lease and the circumstances. Because overholding can be considerably more expensive than tenants expect if a penalty rent clause applies, don't assume staying past expiry without a new agreement is a low-cost, low-risk option — check your lease's specific overholding terms before doing so.