What Happens If a Commercial Lease Is Silent on Assignment in Ontario

Most articles about assigning a commercial lease assume there’s an assignment clause to work with — one that requires landlord consent, and sets out how that consent is to be given or withheld. But what if you pull out the lease and there’s simply nothing there? No assignment clause, no mention of consent, nothing at all.

It happens more often with older or informally drafted leases than you might expect, and it raises a genuinely different question from the usual “will the landlord consent” scenario.

The General Rule: Leases Are Assignable Unless Restricted

As a general starting point in Ontario (and Canadian common law generally), a tenant’s leasehold interest is a form of property that can be assigned like other property interests, unless the lease itself restricts that right. The restriction has to come from the lease — it isn’t assumed by default.

So if a commercial lease genuinely says nothing at all about assignment, the general legal starting point is that the tenant may be free to assign the lease without needing the landlord’s consent, because there’s no contractual restriction requiring it.

This is very different from the more common situation — where a lease does include a covenant against assignment without consent, and the Commercial Tenancies Act implies into that covenant a requirement that consent not be unreasonably withheld, unless the lease provides otherwise. That statutory rule only has something to attach to where a restriction already exists in the lease.

Why “Silent” Leases Are Rarer Than They Look

Before relying on the idea that “my lease is silent, so I don’t need consent,” it’s worth being skeptical of your own read of the document. In practice, true silence on assignment is uncommon in a properly drafted commercial lease, and a lease that looks silent at first glance often isn’t once you read it in full. Watch for:

• An assignment or transfer clause buried in a “general provisions” or “miscellaneous” section rather than a section titled “Assignment”
• A change of control clause that restricts a corporate tenant from being sold or restructured, which can function like an assignment restriction even without using the word “assignment”
• A permitted use clause tied specifically to the original tenant’s business, which can indirectly limit what a new tenant may do with the space even if it doesn’t restrict who holds the lease
• Renewal options or other rights described as “personal to the Tenant,” which may not transfer to an assignee even if the lease itself can be assigned

A lease that is silent on one of these fronts but restrictive on another can still meaningfully limit what a buyer is able to do with the space.

What to Check Before You Rely on Silence

• [ ] Read the entire lease, not just the section that would typically be labelled “Assignment”
• [ ] Check for a change-of-control or corporate-restructuring clause if the tenant is a corporation
• [ ] Check whether any renewal options, expansion rights, or other valuable terms are described as personal to the current tenant
• [ ] Confirm there’s no separate agreement, side letter, or amendment to the lease that adds a restriction not found in the original document
• [ ] Get a lawyer to confirm the lease is genuinely silent before proceeding as if it is

Practical Risks of Proceeding Without Landlord Involvement

Even where a lease may not legally require consent, proceeding with an assignment without telling the landlord at all carries practical risk. The landlord is a party you and the buyer will likely need a working relationship with going forward — for rent payments, maintenance issues, and any future lease amendments or renewals. Surprising a landlord with a new tenant they didn’t know about can sour that relationship even where no consent was legally required, and it can create confusion if the landlord’s own records, insurance requirements, or rent invoicing aren’t updated.

There is also a practical due diligence reason to loop the landlord in: a buyer will usually want landlord confirmation of the lease’s status — that rent is current, there’s no default, and the lease is otherwise in good standing — regardless of whether formal consent to the assignment is legally required.

What to Do Instead

If a lawyer’s review confirms the lease is genuinely silent on assignment:

1. Notify the landlord of the intended assignment as a courtesy, even if consent isn’t legally required
2. Request written confirmation of the lease’s status (rent current, no defaults) as part of due diligence
3. Address, separately, whether the seller remains liable to the landlord after the assignment — silence on consent doesn’t resolve that question, which is a related but distinct issue
4. Document the assignment properly in writing between seller and buyer, regardless of the landlord’s involvement

Frequently asked questions