When Can a Landlord Unreasonably Withhold Consent to a Lease Assignment in Ontario?

A phrase shows up in almost every commercial lease's assignment clause: the landlord's consent "shall not be unreasonably withheld." It sounds like a clear protection for the tenant — but what actually counts as reasonable, and what a tenant or buyer can do if a landlord simply goes quiet, is much less obvious. This matters directly in a business sale, where the assignment of the lease is often on the closing-day critical path.

The Legal Default: Consent Not to Be Unreasonably Withheld

Under Ontario's Commercial Tenancies Act, where a lease includes a covenant against assignment or subletting without the landlord's consent, the Act generally implies a proviso into that covenant: consent is not to be unreasonably withheld. This is a long-standing default rule, applying broadly to commercial leases currently in force in Ontario.

But the Lease's Own Wording Comes First

This is the point that trips people up most often: the statutory "not unreasonably withheld" proviso applies unless the lease itself says otherwise. If a lease expressly gives the landlord sole, absolute, or unfettered discretion to refuse consent, that express wording generally overrides the statutory default. Before assuming the reasonableness standard protects you, read your specific assignment clause — don't rely on the general rule without checking whether your lease has contracted around it.

What Tends to Count as a Reasonable Ground

Whether a landlord's refusal is reasonable is fact-specific and depends on the particular circumstances of the request — there's no fixed checklist that applies to every case. That said, grounds landlords commonly point to, and that tend to be viewed as legitimate business concerns rather than arbitrary objections, generally relate to things like:

• Genuine doubts about the proposed assignee's financial capacity to pay rent and meet the lease's obligations
• A proposed use of the premises that conflicts with the lease's permitted-use clause or with exclusivity rights held by another tenant
• Legitimate concerns about the assignee's experience or suitability to operate the specific type of business at that location

What Tends to Look Unreasonable

By contrast, grounds that tend to be viewed with more skepticism include objections based on little more than personal preference, or using a consent request as leverage to extract concessions unrelated to the landlord's actual risk — for example, treating consent as conditional on a rent increase where the increase isn't tied to any genuine change in the landlord's position. Every situation turns on its own facts, and a landlord's stated reason should be assessed against what it's actually protecting, not taken at face value either way.

If a Landlord Is Stalling: Practical Options

• Put everything in writing. A written request, with a clear description of the proposed assignee and a reasonable response deadline, creates the paper trail you'll need if the issue escalates.
• Follow up formally rather than informally. Repeated informal phone calls are easy for a landlord to leave unanswered; a dated letter or email is harder to ignore and easier to point to later.
• Involve your lawyer early. Correspondence between lawyers often moves faster than tenant-to-landlord conversations, and it signals the request is being taken seriously.
• Build timing protection into the purchase agreement. A closing condition tied to landlord consent, with a defined deadline and a clear consequence if it isn't met, prevents an unresponsive landlord from holding the whole deal hostage indefinitely.
• Understand escalation is a last resort. Where a landlord is genuinely being unreasonable and the lease's own wording supports the statutory standard, there are legal avenues to challenge the refusal — but this is a process with no guaranteed outcome or timeline, and it should be pursued with legal advice, not assumed as a quick fix.

Frequently asked questions