With high interest rates and extensive market shifts, insolvency and bankruptcy are concepts on the minds of many, including commercial landlords. The possibility of tenant insolvency can create uncertainty and unease for landlords leasing to commercial tenants on the brink of financial collapse.
In this article, we compare the four insolvency and restructuring proceedings which may apply to a commercial tenant under the Bankruptcy and Insolvency Act (“BIA“) and the Companies’ Creditor Arrangement Act (“CCAA“). We further outline best practices for commercial landlords and explain the nuances of each proceeding, including its purpose, the requirements for a tenant to proceed, whether there may be a stay of proceedings, whether rent is payable, potential outcomes relating to the lease, and the priority ranking of a landlord’s claim.
By gaining an understanding of the nuances of each proceeding, commercial landlords can anticipate the issues, understand their rights, and plan for the future.
This publication is intended for general information purposes only and should not be relied upon as legal advice.
