CKL COMMERCIAL LANDLORDS - DISTRAINT OR TERMINATE, BUT NOT BOTH - IT'S ILLEGAL

Many commercial landlords do not realize – if you are owned rent by your tenant, you must choose between locking the doors/distraining and termination of the lease. You cannot do both.

You must choose: either distraint or terminate and sue for unpaid rent.

In this case, the plaintiff tenant and defendant WM and Buckingham (landlord) entered into lease for commercial premises.

The tenant intended to completely renovate the unit and open a Mediterranean-style restaurant.

The tenant also paid landlord $16,950 for purchase of its restaurant business, equipment, and chattels left in leased premises. Upon taking possession, the tenant discovered numerous pieces of kitchen equipment had to be replaced.

The tenant did not pay rent as a result. The tenant was locked out for arrears of rent after several months. The landlord distrained the tenant's chattels, changed the locks, and terminated the lease.

The tenant’s action for damages for illegal distraint and improper termination of the commercial lease was allowed in part while landlord counterclaimed for arrears of rent.

The trial judge found the lease termination was proper but that the landlord had illegally distrained the tenant’s chattels.

The trial judge awarded the plaintiff $58,190.74 in damages for conversion and $10,000 in punitive damages, which were offset by damages of $1,294 for unpaid rent awarded to the defendant on its counterclaim.

In addition, trial judge found that WM was jointly and severally liable for these damages with Buckingham.

The landlord appealed. The appeal was allowed in part. The trial judge did not err in holding illegal distraint. The landlord had to choose between mutually exclusive remedies of termination and distress. Instead of making the choice, it attempted to do both and, therefore, distraint was illegal.

Pita Royale Inc. (Aroma Taste of the Middle East) v. Buckingham Properties Inc. (2019), 2019 CarswellOnt 8106, 2019 ONCA 439, C.W. Hourigan J.A., M.L. Benotto J.A., and Grant Huscroft J.A. (Ont. C.A.); varied (2017), 2017 CarswellOnt 20043, 2017 ONSC 5976, Carole J. Brown J. (Ont. S.C.J.).


Thank you for reading this - Jason Ward of WARDS LAWYERS PC.

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This WARDS LAWYERS PC blog is for general information only. It is not legal advice, or intended to be. Specific or more information may be necessary before advice could be provided for your circumstances.

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