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Re-Entry and Termination of the Lease
The Act also specifically protects subtenants in the event the landlord attempts to reenter
and terminate the lease. Section 21 of the Act allows a subtenant to apply to the
court to require a direct lease be granted to the subtenant on such terms as the court
sees fit. Clearly, this would be unacceptable to most landlords and therefore the
consent should require the subtenant to waive its rights under section 21 of the Act.
Alternatively, the landlord may wish to amend the consent to require the subtenant to
agree to pay to the landlord rent calculated at the rates provided in the lease (rather
than the discounted rates in the sublease) rather than having it waive all of its rights
under section 21.
Bankrupt Tenants
Subtenants are also protected in the event the tenant is bankrupt. Subsection 39(2) of
the Act allows a subtenant three months in which to elect to stand in the shoes of the
tenant and to become a direct tenant of the landlord. In this case, however, the rents
payable are the greater of those payable under the lease or the sublease. Most
landlords would not wish to wait three months before knowing whether or not they will
have to relet the premises. Again, most often we will want the subtenant to waive its
rights under subsection 39(2), but may in some instances prefer the subtenant promise
to elect to become the landlord’s direct tenant.
Restrict the Consent to this Subletting
In granting the consent, it should be clear that the landlord is only consenting to this
particular subletting to this particular subtenant on these particular terms. While doing
so, it is also important not to approve the terms of the sublease in case they are to
some extent less onerous than the obligations of the tenant under the lease.
Lay the Groundwork
In order to ensure that your landlord client can require the tenant and subtenant to sign
a form of consent which addresses these matters, the landlord’s standard lease form
should require the execution of the landlord’s then current form of consent as a
condition to approving any proposed sublease. If at all possible, a copy of the consent
should be appended a schedule to the lease without prejudice to the landlord’s right to
amend the same.