Your Commercial Lease Says You Must Stay Open — Can an Ontario Landlord Actually Enforce That?

A continuous-operation clause isn’t in any Ontario statute — it lives entirely inside your lease. Whether it bites turns on one question most landlords and tenants never ask: what remedy do you actually want?

I’m Arthur Zhao, a Toronto real estate broker in my 12th year full-time. Not long ago a small-business owner slid a commercial lease across my desk with her finger on one line — a clause requiring the tenant to “continuously and actively carry on business” for the whole term. Her question was simple: “If I want to close early, can they actually make me stay open?” It is the natural question. It is also the wrong one.

The reason it is the wrong question is that it assumes the fight is about the words on the page. It isn’t. What decides how one of these clauses plays out is something neither side usually stops to name: what the party enforcing it actually wants to get. Below I walk through why that reframe matters, what the Commercial Tenancies Act does and does not give a landlord here, and what going dark really sets in motion inside a lease.

The reframe: two remedies that look alike and aren’t

The Act is silent — and that silence is the whole point

Start with what surprises most people: the Commercial Tenancies Act (R.S.O. 1990, c. L.7) does not mention a keep-open obligation at all. Search its full text for continuous operation or for operating covenant and you get nothing. There is no section that says a commercial tenant must trade, and none that says a landlord can make them. That means a duty to stay open is never something the statute hands you — it exists only if your lease created it, and it means only what your lease made it mean. Whether it has any teeth is a question of how the clause was drafted and of the common law, not of this Act.

What the Act does give a landlord: re-entry and forfeiture

The statutory machinery the Act actually provides is not about forcing a business to trade — it is about ending the tenancy and taking the space back. The Commercial Tenancies Act sets out a landlord’s right of re-entry (s.18); a required notice before re-entry or forfeiture (s.19); the tenant’s ability to seek relief against re-entry or forfeiture (s.20); protection for under-lessees where a superior lease is forfeited (s.21); and who must be parties to an action to enforce that right (s.22). Notice the direction of all of it: if going dark is drafted as a breach, the landlord’s statutory levers point toward terminating the lease and reclaiming possession — not toward a court order that keeps the store lit. (One drafting detail worth knowing: under s.1 the definition of “landlord” is broad — it reaches lessors, owners, and their heirs, assigns and legal representatives — so the party entitled to enforce may be a later purchaser of the building, not only the name you first signed with.)

Section 26 and the trap of quietly cashing the rent

Here is where landlords most often undercut themselves. Suppose a tenant closes, the landlord believes that breaches the operating covenant — and keeps depositing the monthly rent cheques anyway. Continuing to accept rent while asserting a breach can raise waiver: the argument that, by treating the lease as alive and taking its benefits, the landlord gave up the breach. The Act speaks to this directly through s.26, which restricts the effect of a waiver of a covenant. The practical takeaway is not a formula but a caution — how a landlord behaves after a closure can matter as much as what the clause says, and this is exactly the kind of judgment call to put in front of a lawyer before acting, not after.

So what is the clause actually for?

Once you separate the two remedies, the clause stops looking like a leash and starts looking like what it is. For a landlord, its real value often lies less in forcing anyone to trade than in making going dark a defined breach — one that can be priced as a loss and, just as importantly, one that can trigger other machinery already sitting in the lease (think co-tenancy provisions, percentage-rent arrangements, or default remedies that only switch on once a breach exists). For a tenant, the risk of signing it is not “I must physically open every single day.” The risk is what closing sets off: a breach that lets the landlord reach for the levers above. That is the honest way to read one of these clauses on either side of the table.