If a commercial tenant in Hamilton stops paying rent, you do not use the Landlord and Tenant Board. Under the Ontario Commercial Tenancies Act, landlords can legally hire a private bailiff to either seize the tenant’s inventory (distress) or change the locks and terminate the lease after waiting just 16 days.
When a commercial tenant fails to pay rent, it puts immense financial pressure on the property owner. Whether you own a small storefront on James Street North or a massive industrial warehouse in Hamilton, missing a rent cheque requires immediate and decisive action. Fortunately for commercial landlords, Ontario law heavily favours the property owner in these situations.
This guide explains the exact steps a Hamilton landlord must take when a commercial tenant defaults on their rent. We will explore the vital differences between residential and commercial laws, the two main remedies available to you (distress versus termination), and the process of safely executing a lock-out using a private commercial bailiff.
Step-by-Step Process in Hamilton, Ontario
Commercial evictions are governed by the Commercial Tenancies Act (CTA) and the specific contract you signed with the tenant. Because the laws are powerful, any procedural mistake can expose you to a massive civil lawsuit from the tenant. It is highly recommended to consult a commercial real estate lawyer before taking action.
Step 1: Check the Lease and Wait the Mandatory Period
Before you can take any legal action, you must verify the “cure period” in your commercial lease. By default, the CTA requires you to wait 15 clear days after the rent was due. On the 16th day, the tenant is officially in default. However, if your specific lease contract states a shorter grace period (for example, 5 days), the written lease will generally override the standard CTA timeline.
Step 2: Choose Your Remedy (You Cannot Do Both)
Once the default period has passed, you must make a critical choice. You can either perform a “Distress” (seizing their goods to sell for unpaid rent) OR you can “Terminate” the lease (change the locks and evict them). Under Ontario law, these remedies are mutually exclusive. If you change the locks, you immediately lose the legal right to seize their goods without a court order.
Step 3: Hire a Private Commercial Bailiff
You should never attempt to change the locks or seize property yourself. In Hamilton, you must hire an independent, licensed commercial bailiff. 👮 The bailiff acts as your legal agent. They are trained to perform the lock-out peacefully, usually late at night or early in the morning to avoid conflict, and they will ensure all legal notices are properly posted on the front door of the business.
Step 4: Execute the Remedy and Serve Notices
If you choose to terminate the lease, the bailiff will change the locks, post a Notice of Forfeiture, and the tenant will only be allowed back in under supervision to collect their personal belongings. If you choose distress, the bailiff will inventory the tenant’s equipment, lock down the assets, and give the tenant 5 days to pay the rent. If the tenant still does not pay, the bailiff will legally auction the assets to recover your lost money.
How Much Does it Cost in Hamilton?
Taking action against a commercial tenant involves immediate upfront costs, though you can often recover them later.
- Commercial Bailiff Fees: Hiring a licensed bailiff in Hamilton to execute a standard lock-out typically costs between $1,000 and $2,500 CAD. If they are performing a distress and inventorying massive amounts of equipment, the fees will be significantly higher.
- Lawyer Fees: Having a commercial real estate lawyer review the lease and draft the official default notices usually costs between $1,000 and $3,000 CAD.
- Cost Recovery: Most well-drafted commercial leases include a clause stating that the tenant is entirely responsible for all legal and bailiff fees incurred by the landlord due to the tenant’s default.
Comparing Your Two Legal Remedies
| Remedy | What Happens? | When to Use It? |
|---|---|---|
| Distress (Seizure of Goods) | The lease remains active. Bailiff seizes equipment and inventory to auction off to pay the rent. | When the tenant has highly valuable assets on site (e.g., restaurant equipment, expensive tools) and you want to keep the tenant long-term. |
| Termination (Lock-out) | The lease is permanently cancelled. The tenant is locked out and evicted from the property. | When the tenant’s business is clearly failing, assets are low value, and you want to quickly find a new, paying tenant. |
How Long Does the Process Take?
The speed of commercial enforcement in Ontario is incredibly fast compared to residential evictions. Once the mandatory waiting period (usually 16 days) has elapsed, a commercial bailiff in Hamilton can often execute a lock-out or distress within 24 to 48 hours. You do not need to wait months for a tribunal hearing or a judge’s order. If you choose to auction seized goods, the entire process of appraisal and public sale usually concludes within 3 to 4 weeks.
Frequently Asked Questions (FAQ)
Do I have to use the Landlord and Tenant Board (LTB)?
Absolutely not. The Landlord and Tenant Board only handles residential housing. Commercial tenancies are governed by the Commercial Tenancies Act, which allows for “self-help” remedies. You do not need a court order or an LTB hearing to evict a commercial tenant for non-payment of rent.
What happens if the tenant declares bankruptcy?
If the tenant officially files for bankruptcy, all landlord enforcement actions must immediately stop. The federal Bankruptcy and Insolvency Act takes over, and a Licensed Insolvency Trustee will handle the tenant’s assets. Landlords become preferred creditors, but you cannot independently seize goods or lock the doors once bankruptcy is filed.
Can I keep the tenant’s equipment for myself?
No. If you terminate the lease, the tenant’s equipment belongs to them, and you must give them a reasonable window to hire movers and take it away. If you perform a distress, the bailiff must legally appraise and publicly auction the goods. You cannot simply claim ownership of their property to satisfy the unpaid rent.
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