Summary
Selling a business, restructuring or downsizing often means assigning or subletting a commercial lease. Most leases require the landlord's consent. Ontario's Commercial Tenancies Act sets the default rule for that consent, gives the tenant and the incoming party a court route if consent is refused, and limits how far one consent reaches. This post explains those rules for landlords and tenants.
Who it affects
Commercial tenants who want to assign or sublet, the incoming assignee or subtenant, and the landlords asked to consent. The Act does not apply to tenancies and tenancy agreements to which the Residential Tenancies Act, 2006 applies (section 2). Section 2.1 also excludes certain property in which the Crown in right of Ontario has an interest.
The consent rule
Section 23(1) applies to every lease made after September 1, 1911 that contains a covenant, condition or agreement against assigning, underletting, parting with possession or disposing of the premises without consent. That covenant is deemed subject to a proviso that consent "is not to be unreasonably withheld", unless the lease contains an express provision to the contrary.
Ontario government guidance on renting commercial property puts the starting point simply: "Tenants can sublet or assign the lease unless it is prohibited by the lease." For tenants, the first question is whether the lease has such an express provision.
For landlords: before you refuse
The Act does not list what counts as a reasonable refusal; that depends on the lease and the facts. Keep a written record of the request, the information received and the reasons for any decision, and make any consent say exactly what it covers (see section 24 below).
For tenants: if consent is refused or ignored
Under section 23(2), where the landlord refuses or neglects to consent to an assignment or sublease, a judge of the Superior Court of Justice may decide, on the application of the tenant or of the assignee or subtenant, whether consent was unreasonably withheld. If so, the judge may permit the assignment or sublease. The order is the equivalent of the landlord's consent, and the assignment or sublease is not a breach of the lease.
How far a consent reaches
One consent, one act: under section 24, unless it says otherwise, a consent extends only to the permission actually given or the specific assignment or sublease authorized. It does not prevent the landlord from acting on a later breach, unless the consent says so.
Partial consents: under section 25, consent given to one of several co-tenants, or for part of the premises only, does not end the landlord's right of re-entry over the other shares or the rest of the premises.
The risk of skipping consent
Assigning or subletting without a required consent can put the lease at risk. Relief from forfeiture under section 20 does not extend to a covenant or condition against assigning, underletting, parting with possession or disposing of the leased land (section 20(7)(a)). Section 21, which lets subtenants ask the court for a vesting order when the head landlord enforces re-entry or forfeiture, is a separate provision. Under section 21, a subtenant can bring that motion in the landlord's action or in its own action or application in the Superior Court of Justice. The court may vest the property for the whole term of the lease or any less term, on conditions such as payment of rent, costs, damages or compensation, or giving security, but never for a longer term than the subtenant had under its original sublease. Under section 22, when a landlord sues to enforce re-entry or forfeiture, every person claiming an interest in the premises under the lease must be made a party to the action if the landlord knows of the claim or the instrument is registered in the proper land registry office. See commercial lease disputes and your options.
What it means
For tenants and incoming parties, the Act provides a default reasonableness rule and a court route when consent is withheld, but the lease can displace the rule with express wording. For landlords, a refusal should rest on reasons that would hold up, and any consent should say exactly what it covers. For both, getting consent right before closing avoids a dispute that statutory relief may not fix.
Key takeaways
Consent to assign or sublet is deemed not to be unreasonably withheld unless the lease expressly provides otherwise (s. 23(1)).
A judge can permit an assignment or sublease if consent was unreasonably withheld (s. 23(2)).
A consent covers only what it authorizes (s. 24).
Section 20 relief does not extend to covenants against assigning or subletting (s. 20(7)(a)).
Landlords and tenants should settle consent in writing before the deal closes.
Related posts: Unpaid commercial rent: Ontario options · Commercial lease review in Ottawa
Frequently asked questions
Can a commercial landlord refuse consent to an assignment?
If the lease requires consent, section 23(1) of the Commercial Tenancies Act deems that consent not to be unreasonably withheld, unless the lease contains an express provision to the contrary. Whether a refusal is unreasonable depends on the lease and the facts.
What can a tenant do if consent is refused?
Under section 23(2), the tenant, or the proposed assignee or subtenant, can apply to a judge of the Superior Court of Justice. If the judge finds consent was unreasonably withheld, the judge can permit the assignment or sublease, and the order counts as the landlord's consent.
Does consent to one assignment cover later ones?
Not unless it says so. Under section 24, a licence extends only to the permission actually given and does not prevent proceedings for a later breach unless the licence says otherwise.
Whether you're a landlord or a tenant, book a consultation
For help with a lease, see our commercial leasing lawyers in Ottawa.
Francis Mehr LLP handles commercial lease matters for landlords and tenants in Ottawa and across Ontario. Book a consultation: call (613) 226-1011 or contact us.
Written by the lawyers of Francis Mehr LLP. Updated October 30, 2026. This post is general information about Ontario law as of that date, not legal advice. Every lease and every dispute turns on its own wording and facts; get advice on your situation before you act.
