1. COMMERCIAL LEASES/ LANDLORDS AND COMMERCIAL TENANTS Calgary Chamber – Business Recovery Expo July 31, 2013 Robert (Rob) T. Fooks Partner, Corporate | Commercial Michael Kwiatkowski Partner, Litigation & Dispute Resolution

2. Overview Key Lease Terms (During Tough Times) Insurance & Indemnities Continuing Tenant Obligations Recourse, Remedies & Alternatives

3. Commercial Leases vs. Residential Commercial contract between landlord & tenant Unlike Residential Tenancies Act, there is no commercial act in place to supplement or impose any additional protections or rights You need to review your lease carefully and in detail!

4. Key Lease Terms Damage & Destruction LL obligations & Tenants’ rights vary Issues related to insurance Abatement (of rent) May be some, none, minimum, additional Default (generally) Force Majeure Performance of obligations (both sides) may be excused or delayed in certain circumstances

5. Insurance Review your policies carefully Limitations of Business Interruption Coverage

6. Indemnities Indemnities & personal guarantees Act to tie-in individuals personally to the obligations of the (corporate) tenant

7. Continue to pay rent! No statutory provisions in Alberta Commercial Tenancies Act, RSO 1990, c L.7 The destruction of leased property will not afford a defence to a tenant in an action for rent. The burden of proof in an action for recovery of rent is upon the tenant to show that the damage has rendered the premises unfit for his or her purposes. In the lease of non-residential premises, there is no obligation upon the landlord to repair unless there is an express covenant to that effect, and the covenant for quiet enjoyment does not of itself oblige him or her to repair or rebuild the leased premises in the event of damage or destruction.

8. Occupation of Premises Where a lease provides that the payment of rent is to be suspended upon the destruction of the premises, the landlord is nevertheless entitled to occupation rent where the tenant continues to occupy the premises in spite of their destruction. Abandonment of premises by a tenant is a fundamental breach of the lease, which entitles the landlord to a number of remedies.

9. Remedies Check the lease Work it out with the landlord Mediation Arbitration (may or may not be in the lease) Court application via: Originating Application and supporting Affidavit; or Statement of Claim coupled with a Notice of Application and Supporting Affidavit. Watch provision in lease whereby landlord may recover legal fees!

10. For more information, please contact: Robert (Rob) Fooks Partner, Corporate Commercial Practice Group rtfooks@mcleod-law.com 403.225.6404 Michael Kwiatkowski Partner, Litigation & Dispute Resolution Practice Group mkwiatkowski@mcleod-law.com 403.873.3706 Contact Us