Category Archives: News

Do You Know Your Buildings Rules and Regulations?

Rules and Regulations spelled in blocks on a desk.

After spending a few hours reading a lease, like most people, you’re crossed-eyed or asleep before you hit the list of ‘Rules and Regulations’.

The rules and regulations in a lease describe important operational aspects of a building like business hours, trash removal, cleaning, noise control, etc.  They’re in leases to preserve the quality of a work environment and image of a building. 

You can usually find them in Ottawa leases at the back of the document, behind the signature page, and tucked into one of the additional ‘schedules’ or ‘exhibits’. 

Not paying attention to the rules and regulations can be a mistake if they end up negatively impacting the use of your space and operation of your business.

To help you avoid potential issues, I thought I would provide a list of rules and regulations that are common sources of conflict between landlords and tenants in Ottawa.


Ottawa is a bicycle-friendly City – or at least we are trying to be.  If you have an owner of an expensive bike in your office, they probably don’t like to leave it outdoors in fear of having it stolen or damaged from exposure to Ottawa weather. 

The problem is bicycles take up a significant amount of space in elevators and stairwells, and wet or muddy bikes can make a mess in lobbies, corridors, and your suite.  Don’t assume your Landlord will consent to you or your team bringing bikes into the building in the absence of a designated bike storage area.

Space Heaters and Fans

office worker frozen in chair

Even employees in the newest state-of-the-art buildings complain about being too hot or too cold.   I’m confident that there are some ‘thermally challenged’ people in your office.  

It’s not uncommon to see a small space heater or fan on the floor of the office, but their use is often prohibited for fire safety reasons, the air balancing issues they can cause, and the added electricity they consume.

Window Coverings or Treatments

post it note window 'art'

Eye-catching, colourful roller shades may add to the character of your office space, but if every tenant in the building has different colour window coverings, a building can start to look like a Christmas Tree…and not in a good way.  The same goes for window films and post-it-note ‘window art’ (see Snoopy, Ninja Turtles, and Waldo above).


The windows of your premises may offer great signage exposure, but don’t assume that you can put a sign (or anything for that matter) in a window or on the windowsill. 


All office tenants receive packages, but there are times when courier traffic can be disruptive to other tenants in your building.  As such, your landlord may have the right to restrict deliveries to your premises if the traffic generated is a nuisance.

Elevator use

When an elevator is on service, it can be an inconvenience to other tenants, so they’re usually rules and regulations in place that control elevator use.

If you’re planning a move, or you’re renovating your suite, be sure to review the rules and regulations concerning elevator use. You’ll likely need to contact the landlord/building manager to coordinate the use of an elevator. 

Know the Rules and Regulations ASAP

If you’re looking at space make sure you understand if the Buildings’ rules and regulations will impact the operation of your business. If there are potential conflicts, address them as soon as possible in your conversations with the listing broker/landlord. You may have an opportunity to get a waiver permitting non-compliance with a certain rule or regulation.

Influencing Rules and Regulations

Keep in mind, your ability to negotiate the rules and regulations of a lease is a function of your “influence” (i.e. the size of your space relative to the size of a building). You are going to have far more influence if you occupy 50% of a building than you will if you occupy 5% of a building. 

Do you have questions about a building’s rules and regulations? Email me at

Expansion Rights: ROFO vs ROFR

crowded office space

Growth can be hard to project.  New rounds of funding, significant contracts, new products, acquisitions, and mergers can bring rapid growth.  Sometimes this growth happens in the middle of a lease commitment. In situations like this, having the right to expand your space can be extremely valuable.

Generally, there are two ways to go about expansion rights in Ottawa leases – there’s a ‘Right of First Offer’ (ROFO), and there’s a ‘Right of First Refusal’ (ROFR).  Although they both can give you the right to expand, they can be very different and are often confused.


When you have a Right of First Offer, your landlord is obligated to notify you if a space is becoming available.  Then your landlord has to offer you the space on the terms and conditions they’ll be trying to lease the space to other prospective tenants. 

Once you receive notice that space is becoming available, you have a set amount of time, typically five to ten days, that you have to agree to lease the space. 

If you fail to notify your landlord that you’ll lease the space, then your ROFO expires, and your landlord can lease the space to another tenant.  Even if your landlord has to reduce the rent to lease the space to another tenant, they have no obligation to offer the improved leasing terms to you and are free to lease the space to someone else.


Unlike a ROFO, if you have a Right of First Refusal, the landlord is free to market the space to other prospective tenants; however, when the landlord reaches an agreement with another tenant, they have to disclose the terms and conditions of the deal they have negotiated with you.  Then you have the right to lease the space on the same terms and conditions that were negotiated with the prospective tenant.  You are getting the “last look” at any incoming offer for the space, and you have the right to match the offer.


So, let’s say you have an existing lease for roughly 8,000 sq. ft. of office space and 2,000 sq. ft. of space adjacent to your Suite is coming available. 

You have a ROFO, so your landlord offers you the space at their posted rent and terms of $18 Net per sq. ft., with a $20.00 per sq. ft. allowance, and a five-year lease term.  Based on the notice period of your ROFO, you have to notify your landlord if you want to lease the space on those terms within five business days. 

You do the arithmetic and realize that the $18 Net is more than you are paying now, and the renovations you would have to do on the expansion space won’t be covered by the $20.00 per sq. ft. allowance.  So, you decline the space, your ROFO expires, and your landlord is free to lease the space to another tenant.

Now, if you have a ROFR, you can sit back and wait to exercise your right to lease that 2,000 sq. ft. vacancy until there is another offer.  So, your landlord markets the space diligently, conducts tours, and sends out a few leasing proposals to prospective tenants, and nothing materializes. 

Finally, eight months after your landlord started marketing the space, they receive an offer, and negotiate the terms.  The prospective tenant manages to conditionally lease the space at a Net rent of $16.00 per sq. ft., with a $30.00 per sq. ft. allowance for a five-year lease term. 

Because you have a right of first refusal, you have the right to lease the space on these improved leasing terms, and you didn’t have to make any decisions for the eight months it took your landlord to find a new tenant.

Landlord’s Don’t Like Them

unhappy landlord tearing a lease.

As I am sure you have concluded, a ROFR gives you far more control over your potential expansion.  The issue is that it creates problems for landlords – so they loathe giving them. 

ROFR’s seriously encumber a landlord’s ability to lease space.  Imagine if you find the perfect space but are told by the landlord that it’s subject to a neighbouring tenant’s ROFR.  How likely are you to spend the time and energy negotiating leasing terms only to have those terms offered to another tenant first?  Like most tenants, you would probably move on to another option. 

Competitive Leverage Required

man using competitive leverage

Whether it is a ROFR or a ROFO, you are going to need some competitive negotiating leverage to get expansion rights into your lease.  But if you need more space during your lease term, expansion rights can be valuable and certainly worth pushing for.

Have a question about expansion rights? Send me an email at

Are you Being Asked to Indemnify A Lease?

You have found the ideal space for your company, you’ve generally agreed to business terms, and when you receive the draft lease, you see a clause about ‘indemnification’. There has been no mention of the word ‘indemnification’ and you have no idea what it means.

Like many terms you only encounter when you lease commercial space, indemnification is likely a new concept to you. If you ‘indemnify’ a lease, what you are doing is promising to reimburse the landlord if the tenant doesn’t fulfill the terms of the lease.

For example, if you sign a lease a five-year lease, of 5,000 sq. ft., paying $25.00 gross per sq. ft., on behalf of your company, the company is making a $650,000 (5,000 sq. ft. x $25.00 per sq. ft. x 5 years) rent commitment to the landlord in return for the use of the space.

If you agree to personally indemnify the lease, depending on the language of the clause or separate indemnity agreement, you may be promising that you will compensate the landlord for their loses if the tenant (your company) stops paying rent and is in default.

So, if your company is in default at the end of the third year of the lease because it is not paying rent, the landlord can seek damages for their losses from you (your personal assets) as the indemnifier.

These damages could include the remaining value of the lease – $250,000 (5,000 sq. ft. x $25.00 per sq. ft. x 2 years) and costs incurred finding a new tenant. The terms of the indemnity clause or agreement may even require you to pay back the remaining value of the lease if the landlord finds a new tenant before the end of your lease term.

So why would anyone agree to the financial exposure of an indemnity agreement? The reality is, it’s standard practice in Ottawa commercial leasing.

It’s About Risk

Business person measuring risk with a ruler.

You see, when landlord’s lease a space, they may have to spend money on prepping the space for a tenants leasehold improvements (aka landlord’s work), leasehold improvement allowances, leasing fees, and legal expenses.

If a tenant breaks the lease before the end of the term, the landlord is not going to be able to recover the full value of the money they have invested in the lease.

As a result, they do their best to mitigate this risk with indemnification agreements.

If you have a new business or an existing business with financials that don’t give a landlord confidence, don’t be surprised if they ask for an indemnifier.

This is especially true if it’s a retail space because retailers’ rate of default is typically higher than industrial and office tenants. It can also be the case if there is a strong demand for the space, driven by low vacancy or the uniqueness of a property.

Ways Around Indemnification

If a landlord wants you to indemnify a lease, the best way to reduce your financial exposure is to minimize the landlord’s perceived risk of leasing you the space. Here are a few ways to accomplish this:

  1. Reduce the landlord’s upfront costs – for example, minimize the landlord’s work and reduce the leasehold improvement allowance.
  2. Increase the deposit amount – increase the deposit amount from first and last month’s rent to the value to of 3, 4, or more months of rent.
  3. Provide a letter of credit – a letter of credit or ‘LC’, is a contract created by your lender saying that they promise to compensate your landlord for their loses should your company be in default.
business people negotiating a contract

When There’s No Way Around It

Sometimes, there’s no getting around an indemnity agreement.

If that’s the case, do you best to:

  1. Reduce the amount of the indemnity – agree to pay back the landlord’s unamortized upfront costs and the rent until another tenant has leased the space.
  2. Introduce an expiry date to the indemnity – have the indemnity expire after a few years of faithfully paying rent and living up to the terms of the lease.

Do you have a question about indemnification? Please email me at

10 Questions You Should Ask About Parking

1. What’s the parking ratio?

Parking for commercial tenants in Ottawa is usually allocated based on a ‘Parking Ratio’. A parking ratio is expressed as the number of spaces that you get for every 1,000 sq. ft. of the area you lease. Urban Ottawa office tenants generally get 0.5 to 0.75 spaces for every 1,000 sq. ft. they lease while suburban Ottawa office tenants will get 2.5 – 4 spaces for every 1,000 sq. ft. they lease.

For example, a 5,000 sq. ft. office tenant with a parking ratio of 0.5:1,000 sq. ft. would be allotted 2 – 3 parking spaces.

2. How accessible are the parking spaces? 

The ease of parking accessibility can vary. Parking spaces can be blocked-in by other vehicles (tandem or stacked), have valet service, accessed via one-way streets, open 24/7 or only during standard business hours, be serviced by elevators or stairs, have height restrictions etc.

3. What do you charge for parking?

The closer you are to Ottawa’s downtown core, and the more convenient parking is, the more expensive spaces are going be. Below I have listed how much you will generally pay for parking each month:

  • Urban area underground: $150 – $260
  • Urban area surface parking: $100 – $150 
  • Suburban deck parking: Free – $75
  • Suburban underground: $50 – $75 
  • Suburban surface: Free – $60 

4. Who manages the parking lot?

Landlords tend to be more lenient enforcing parking ratios, the use of reserved spaces, and the display of parking passes when they manage the lot themselves.  If they use a parking management company, you can count on ticket-happy attendants enforcing the rules.

5. How secure is the parking lot?

Does a parking attendant patrol the lot? Is access to the lot controlled? Is the lot well lit?  Does the lot have cameras?  Does the elevator from the garage have direct access to the office space?

6. What if I need more parking?

If other tenants underutilize parking, or the Landlord has access to other parking lots, they may provide additional parking on a month-to-month basis. But remember that month-to-month parking spaces are not guaranteed for the term of the lease and can be taken away.

7. Will the cost of parking change? 

Unless otherwise stated in your lease, the cost of parking can change.  This is especially true if you’re paying a below-market rate for your parking. 

8. Is the parking purpose-built or located on a future development site?

Purpose-built parking is intended to serve tenants and their visitors. Parking on a development site can disappear when a new building is being constructed.

9. Does the parking lot need repair?

All lots will require significant maintenance at some point in their lifecycle. If there is maintenance planned for a parking lot during the term of the lease, make sure you understand the implications for your use.

10. How is snow removal managed?

During an Ottawa winter snow can pile up. If the snow is not removed quickly, precious parking spaces can be lost to mountains of snow. 

Don’t Miss Your Option to Renew

Did you feel relief when you finalized the lease of your new office space?

How about when you finally got everything to look and operate the way you wanted?

Contemporary office space

That satisfaction may be sweet — but it means you probably pushed most of that ‘no longer relevant’ lease jargon to the back of your mind.

When you moved to your current office space, you made a considerable investment in the design, renovations, furniture and IT network based on your requirements. 

In an effort to protect your interest in the space you’ve carefully created, you likely negotiated an option to renew.

After all, who wants to invest all that time and money only to be forced to relocate at the end of their lease?

Filed Away and Forgotten

More often than not, tenants sign their lease, file it away and check off that box on their to-do list.

…And then, they completely forget about it. 

Why re-visit all that legal mumbo jumbo? It’s not exactly a page-turner.

person asleep at desk reading a lease.

Where to look for your Renewal Rights

Once you have found your lease (and brushed off any dust) skip to the table of contents and try to locate a clause called “option to renew” or “right to renew”.  Sometimes this is buried in the “special clauses” on a separate schedule. 

If you can find the clause it will likely read something like the following:

“The Tenant shall have the option to renew provided the Tenant is not in material default of the Lease, with respect to the Leased Premises and any additional space leased pursuant to the Lease…”

Note, if you have been in ‘default’ you may have lost the right to exercise the option to renew.

The Number of Options and Length of Term

Then the clause will typically state how many options you have, and how long the renewal term will be – something like this:

…for One (1) additional term of Five (5) years on the same terms and conditions…”

Fair Market Rent

Next, the clause will provide some general guidelines for the renewal term rent:

“…save only for the Net Rent and any further Renewal Options. The Net Rent during the renewal term will be the fair market rent, all economic inducement factors considered for comparable premises in comparable buildings agreed between the parties, and failing such agreement, as determined by arbitration pursuant to the Provincial Arbitration Act.”

A Critical Date

notice date on a calendar.

And, finally, there will be a period that you are to provide written notice:

“To exercise this Option to Renew, the Tenant shall provide written notice to the Landlord no later than ______(typically 6 to 12 months) months prior to the date of expiry of the current term

What if I can’t find the Clause or I miss my Notice Period?

If you don’t have an option to renew, or you missed your notice period…. don’t panic!  Your landlord likely wants you to stay, and they probably aren’t going to lease your space to someone else just yet.

That said, what if a much larger tenant in the building needs expansion space? Perhaps there is a tenant with a better use?  Maybe there is someone else that is willing to pay more than you for the space? 

for lease sign in window.

Your landlord is likely a good person, but let’s face it. They’re also running a business. I know if I was in their shoes, I would do my best to accommodate the larger tenant – even if that meant forcing a smaller tenant to relocate, I would consider a better use for the space, and I would try to get a higher rent.

Take Action Now

person writing action plan.

To ensure you don’t let your option to renew slip away, consider doing the following:

  1. Create a lease summary that highlights critical dates in your Lease such as your notice period;
  2. Set a calendar alert or a reminder — one that you’ll pay attention to — of those critical dates;
  3. Prepare your renewal notice in advance and append it to your lease.

Think of it as part of a bigger leasing strategy that aims to protect your interest in your space and avoid the unnecessary, last-minute scrambling of being forced to relocate.

It’s just good business. And, if you don’t have the time or interest in taking these steps, request a lease summary from your lawyer, or outsource it to a broker.

For common questions like “can I renew my lease for less than the whole space?”, “can a subtenant exercise an option to renew?”, “will my lease automatically renew?”, “are a lease renewal and extension the same thing?” please contact me directly.

Look out for my next post where I review ‘fair market rent’.