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Debra, Lawyer
Category: Canada Law
Satisfied Customers: 100023
Experience:  Lawyer
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Alberta: Commercial tenant / landlord issue. I have been

Customer Question

Alberta: Commercial tenant / landlord issue. I have been in business for 20 years. My shop is in an industrial condo that was built in 1970. My rent doubled about 10 years ago when an investment firm from Vancouver purchased my building in a bundle of 21 buildings in Edmonton. A few years later it was sold to an Investment firm from Ontario.
I tried to escape the unusually high triple net rent 3 years ago at the end of a lease term but there was nothing to choose from as far as available properties to move to. It was a boom time in Alberta in 2013. The leasing company for the owner knew I was stuck and really put the screws to a high staggered lease over 3 years. I had to sign or go out of business.
In a nutshell: My current lease ends on June 30, 2016. Because of the major downturn in the economy in Alberta - there are many places available to buy and lease and I am actively looking for the right deal. Trying to sell myself at the banks in an economic downturn with the uncertainty for the future is a bit of a challenge but I am going to try.
In June 2015 my rent was to go up to @ 7200.00 per month and I was already having a difficult time at 6500.00. Business was suffering dramatically and I tried to negotiate a lower rent of 5250.00 per month. The owners would not negotiate and I continued to pay 5250.00 per month (sometimes that was tough). They would send me a monthly letter that would show the rent shortage accrual. Each letter stated that while the landlord reserves the right to take remedies as it sees fit including but not limited to a termination of the Lease.
In the same letter it also stated: " We will provide you with further notice in the event that the Landlord should elect to treat the Lease as terminated."
On Wednesday March 30, 2016 at 7:30 am, prior to opening - The leasing agent for the owner had a locksmith break into my shop and change all the locks. The alarms went off and the police came - quite a fiasco.
I was in a state of shock and proceeded to phone whoever I could to try to alleviate the situation. Of course I couldn't get the agent until later in the morning and was able to arrange cashing in my RRSP's to pay the rent shortage. We were allowed back into my shop around 2:00 PM.
During the day - one of my largest customers came to drop off a rush order and they saw the sign. I did call them - but they had to get the job done at a competitor's shop. This is definitely not good for my business and that was one customer of many, and I don't know which ones so I could call and reassure.
Large nutshell - sorry. At the end of the day - these are my concerns.
-why did they not send me a letter that gave me 24-48 hours to rectify the rent
shortage. No consideration given to the effect on my business.
-why would they not negotiate a lower rate - many landlords have done so in Edmonton.
-I had no idea this was about to happen - the relationship with the agent has been
congenial for years. I don't understand.
-I don't know how to measure the damage to my business that may have been caused
by this harsh, unexpected action.
-Why is there no protection for tenants in a commercial lease and why are tenants
expected to pay property tax on the landlords property.
Advise on potential action that I can take in this situation would be much appreciated.
Thank you
Submitted: 1 year ago.
Category: Canada Law
Expert:  Debra replied 1 year ago.
What does your lease say about what happens if you default?
Customer: replied 1 year ago.
(Posted by JustAnswer at customer's request) Hello. I would like to request the following Expert Service(s) from you: Live Phone Call. Let me know if you need more information, or send me the service offer(s) so we can proceed.
Customer: replied 1 year ago.
Hello - I am a little confuse on how payment / answer routine works :o)
Expert:  Debra replied 1 year ago.
You have paid for this question and no matter how much we need to go up and back you don't pay again. It seems like you have requested a phone call. There is another fee for that. But I cannot take the phone call. I know the site offers this service but the site is based in the US and in Canada the rules of my law society prohibit me from speaking to you on the telephone as you are not my client. So I can only help by continuing to post over this site with you.
Customer: replied 1 year ago.
No worries - My lease was created about 10 years ago and the new investment company owner has adopted and transferred as current. It is an extremely inclusive lease, about 40 pages long. Prior to signing the first time my lawyer said he had never seen one like that took care of the landlord interests completely. At the times I renewed - I had no other option other than close shop. I do have some options this time around and even if I didn't I would rather close. It has been brutal.
Customer: replied 1 year ago.
There is not a circumstance in the lease that would make anything that the landlord did unacceptable. By sending me monthly letters that stated I would receive a warning prior to the landlord taking action - I did feel some level of comfort in paying a reduced rent. If they had simply sent me a note 24 - 48 hours in advance - I would have been able to correct the situation. By breaking into my shop prior to opening it just served to be extremely humiliating and I am not sure the damage to my customer base. I have been making reassurance calls since the break in.
Expert:  Debra replied 1 year ago.
Just so I'm clear about what you are saying, are you saying that unfortunately he did whatever he was permitted to under the lease and so did actually not breach the provisions of the lease?And if that's the case are you saying that he breached a verbal agreement with you because he made it clear to you that he would not take the steps at this current time and would give you notice if he was going to do that?
Customer: replied 1 year ago.
Since the lease permits anything and there are absolutely no regulated protections for the tenant that I am saying that he breached a monthly letter stating the total arrears and that if the landlord decided to act on the lease as terminated that I would receive further notification. The letter gave me a false sense of security in thinking that I would receive a notice prior to the act of termination. Perhaps a letter suggesting that I had a certain amount of time, 24 to 48 hours for example, to come up with the shortfall. I have huge equipment and would be unable to escape with less than 2 week notice. Many landlords in the city have negotiated lower lease rates due to the downturn in the economy in Alberta . This landlord would not negotiate and I paid what I could squeeze - @ 75%.since last July 2016.
Expert:  Debra replied 1 year ago.
Then you have a good case. He didn't have to reduce the rent but he most assuredly had to adhere to his agreement and he did not and you relied on his agreement to your detriment and suffered damages and so he has to compensate you for any damages you incurred as a result of this breach.Does that help?
Customer: replied 1 year ago.
Yes - that helps - Thank you = is there anything I can do myself without going to a lawyer? What would you do if you were me?
Expert:  Debra replied 1 year ago.
I would pay a lawyer to send a letter threatening a lawsuit but then if I couldn't afford the lawyer I would pay the lawyer to advise me and then self-represent.
Customer: replied 1 year ago.
Thanks for your help :o)
Expert:  Debra replied 1 year ago.
You are very welcome. Please be sure to rate me before you go so that I can receive credit for my work. Take good care.

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