When a tenant defaults on rent, one of the remedies available to commercial landlords is that of terminating the lease and re-entering to take back possession. The Commercial Tenancy Act contains rules to regulate this remedy. When exercising this right, landlords do well to ensure that their actions are carried out closely in accordance with the Act’s provisions.
Under section 70 of the Bankruptcy and Insolvency Act (BIA), when a debtor assigns into bankruptcy, or is adjudge a bankrupt by a court, and subject to the rights of secured creditors and other provisions of the BIA, all of the debtor's non-exempt assets pass to and become vested in a Licensed Insolvency Trustee. The trustee will realize on the assets and, together with any other proceeds generated in the course of the bankruptcy, distribute the proceeds to creditors. However, not all creditors are treated equally.
When a commercial tenant falls into arrears, the landlord has a number of options against the tenant. However, to ensure a successful result, landlords must understand the remedies available to them and the legalities surrounding these.