Repair and Maintenance Obligations in Ontario Commercial Leases

A broken HVAC unit in July, a leaking roof above your retail floor, a crumbling parking lot in front of your café — who pays for repairs in a commercial lease is not always obvious. Unlike residential tenancies, Ontario commercial leases do not impose a mandatory statutory repair regime; instead, repair and maintenance responsibilities are almost entirely allocated by the lease itself. Understanding those repair and maintenance obligations before you sign protects you from expensive surprises down the road.

The Baseline: Commercial Tenancies Act vs. Lease Terms

Ontario's Commercial Tenancies Act contains limited repair provisions and does not set out a comprehensive framework for who maintains what. Courts have applied common-law principles to fill gaps (for instance, a landlord generally has an implied obligation to deliver premises that are fit for their intended use at the start of the lease), but once the lease is signed those implied obligations are almost always overridden by the express lease language.

This means the lease itself is the definitive answer to "who fixes what."

Typical Allocation of Repair Responsibilities

While every commercial lease is different, the following allocation is common in Ontario net-lease contexts:

Landlord Typically Responsible For:

• Structural elements: Foundation, load-bearing walls, exterior walls, roof structure (not roof membrane), columns
• Building systems serving multiple tenants: Main electrical panels, main plumbing stacks, elevators
• Common areas: Parking lot, landscaping, lobbies (as part of CAM costs passed back to tenants)
• Exterior building envelope: Roofing and waterproofing — though this varies; some net leases push even this to tenants

Tenant Typically Responsible For:

• Interior of the demised premises: Flooring, interior walls, ceiling tiles, interior doors
• Tenant's own mechanical systems: HVAC units serving only the tenant's space (see below), plumbing within the unit
• Electrical within the unit: Wiring, fixtures, and panels dedicated to the tenant's space
• Tenant's trade fixtures and equipment: Everything the tenant brought in
• Damage caused by the tenant or their guests: Negligence or misuse is the tenant's responsibility regardless of what system is involved

The HVAC Problem

Responsibility for heating, ventilation, and air conditioning (HVAC) systems is one of the most frequently disputed areas in Ontario commercial leases. The basic question is:

• Does the unit serve only your space? → Usually your responsibility.
• Does it serve the whole building or multiple tenants? → Usually the landlord's responsibility (recovered through CAM).

But many leases push all HVAC maintenance and repair to the tenant — including the obligation to enter a mandatory preventive maintenance contract with a licensed HVAC service company. If the unit fails, the tenant pays for the repair and any replacement.

Negotiate this carefully. A rooftop HVAC unit replacement can cost tens of thousands of dollars. Consider:

• Requesting a capital expenditure exclusion — the landlord covers the cost of replacing major HVAC components (compressors, heat exchangers) while the tenant handles routine service and filters.
• Asking for a landlord warranty that the HVAC system is in good working order at the start of the lease.
• Capping the tenant's annual HVAC repair obligation.

Structural Repairs: Who Bears the Cost?

Most leases assign structural repairs to the landlord, but the cost is often recovered through CAM/TMI charges passed back to all tenants proportionately. The distinction matters:

• If the lease says "landlord maintains structure but may include costs in CAM," you indirectly pay your share of structural work.
• If the lease says "tenant is responsible for structural repairs within the demised premises," you bear the full cost of any structural issue in your unit.

The second scenario is unusual but not unheard of in older strip-mall or flex-industrial leases. A thorough review will catch it.

Condition at Delivery: The Baseline Inspection

Before you take possession, conduct and document a thorough inspection of the premises. The lease should specify the condition in which the landlord is delivering the space. Common approaches:

• "As-is": You take the space in its current condition, defects and all.
• Landlord's work schedule: The landlord delivers the space after completing a defined list of improvements.
• Blank canvas: The space is cleared and cleaned; the tenant builds everything from scratch.

For "as-is" deliveries in particular, have the HVAC, plumbing, electrical, and roof inspected by professionals before possession. Document anything that is deficient and get the landlord to acknowledge it in writing, so you are not later blamed for pre-existing conditions.

Repair Covenants and Breach

A tenant's failure to maintain the premises in the required condition is a breach of the lease. The landlord may:

• Issue a notice requiring the tenant to perform the repairs
• Step in and perform the repairs themselves, charging the cost back to the tenant as Additional Rent
• Treat the failure as a breach and, after proper notice, exercise remedies including distress or termination

Equally, if the landlord fails to perform an obligation they are responsible for, the tenant may have remedies — though self-help (performing the work and deducting it from rent) is risky without a specific lease clause permitting it. Do not withhold rent or deduct repair costs without legal advice.

Frequently asked questions