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Corporate

Can I negotiate a right to renew when I sign a commercial lease for my Ontario business?

TSL Written by the Treadstone Law team· Updated August 2026

Yes, and you generally need to, because Ontario law doesn't give a commercial tenant an automatic right to renew a lease once the term ends — a renewal right only exists if it's actually negotiated and written into the lease itself, typically as an "option to renew" clause. Without one, the landlord is free to decline to renew, lease the space to someone else, or offer renewal only on whatever terms it chooses once the original term expires.

A well-drafted renewal option should spell out how and when the tenant has to give notice to exercise it, how long the renewal term will run, and how the renewal rent will be determined — commonly either a pre-set rate, an agreed formula like a fixed increase, or a mechanism such as appraisal or arbitration if the landlord and tenant can't agree on fair market rent at the time. A vague option, or one that leaves renewal rent entirely to future negotiation with no fallback mechanism, can end up being difficult to enforce in practice.

If your business depends on staying in a particular location long-term, or you're making a significant investment in leasehold improvements, negotiating a clear, workable renewal option upfront is one of the more valuable protections you can build into the lease.

Key takeaways

  • Ontario commercial tenants have no automatic renewal right; it must be negotiated into the lease.
  • A renewal option should specify notice requirements, renewal term length, and how renewal rent is set.
  • A vague renewal clause with no fallback rent mechanism can be difficult to enforce later.
  • Negotiate a clear renewal option upfront if long-term occupancy or major leasehold investment is planned.
This is general information, not legal advice. It doesn’t create a lawyer–client relationship, and the rules can change. For advice on your situation, a Treadstone corporate lawyer can help.
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