Tenant Covenants and Remedies Practice Questions

Question 1 of 5

A national retail chain proposes a 'go-dark' provision in their lease allowing them to cease operations while continuing to pay rent. Why would a tenant want this right, and why would a landlord resist?

• AA go-dark provision benefits both parties equally — go-dark provisions create a significant tension between the tenant's flexibility needs and the landlord's interest in maintaining an active, vibrant property, under the terms of the lease agreement, which typically addresses rent escalation, operating costs, maintenance responsibilities, renewal rights, and permitted use restrictions
• BThe tenant wants go-dark rights to maintain strategic flexibility — they can cease operations at an underperforming location while paying rent and potentially subletting, without triggering a default for violating continuous operation requirements; the landlord resists because a dark storefront reduces foot traffic, harms adjacent tenants, triggers co-tenancy clauses, and damages the centre's reputation — even though rent is being paid, the operational vacancy creates significant collateral damage
• CGo-dark provisions are standard in all retail leases, based on standard commercial leasing practices that allocate costs, risks, and responsibilities between landlord and tenant according to the negotiated lease provisions
• DLandlords welcome go-dark provisions because they continue to receive rent, under the terms of the lease agreement, which typically addresses rent escalation, operating costs, maintenance responsibilities, renewal rights, and permitted use restrictions

Question 2 of 5

A tenant's lease requires them to restore the premises to 'original condition' at lease end. The tenant invested $350,000 in build-out including custom millwork, upgraded electrical, and a server room. What does the restoration obligation mean for the tenant?

• AThe tenant can leave the improvements in place because they add value to the space, considering that the restoration obligation overrides any value the improvements may add
• BThe tenant must remove all non-building-standard improvements, repair any damage caused by removal, and return the space to the condition it was in at lease commencement — the restoration cost could be $100,000 or more depending on the scope of work required
• CThe landlord cannot enforce restoration clauses if the improvements are in good condition
• DRestoration obligations apply only to residential leases, not commercial

Question 3 of 5

A tenant is negotiating a 'right to roof' provision for their office lease to install satellite equipment on the building's roof. What key provisions should be included?

• AThe tenant can simply install equipment on the roof without any lease provision — installing equipment on the roof without a lease provision or landlord consent would be unauthorized and could constitute a lease default, damage the roof membrane, and void the roof warranty
• BRoof access rights are included automatically in every office lease, under the terms of the lease agreement, which typically addresses rent escalation, operating costs, maintenance responsibilities, renewal rights, and permitted use restrictions
• CA roof access agreement should address: (1) the specific location and footprint of the equipment, (2) structural engineering certification that the roof can support the equipment, (3) the tenant's obligation to maintain and insure the equipment, (4) the tenant's responsibility for any roof damage or warranty voiding caused by the installation, (5) the landlord's right to relocate the equipment if necessary for roof repairs, (6) removal obligations at lease end, and (7) any licence fee for roof access
• DThe tenant should install equipment on their own balcony instead, based on standard commercial leasing practices that allocate costs, risks, and responsibilities between landlord and tenant according to the negotiated lease provisions

Question 4 of 5

A specialty retailer negotiates an exclusivity clause in a shopping centre lease. The landlord agrees that no other tenant will sell 'women's fashion.' Six months later, a new tenant opens selling athleisure wear marketed primarily to women. Does this violate the exclusivity?

• AClearly yes — athleisure is women's fashion, under the terms of the lease agreement, which typically addresses rent escalation, operating costs, maintenance responsibilities, renewal rights, and permitted use restrictions
• BExclusivity clauses do not apply to athleisure because it is a new category, under the terms of the lease agreement, which typically addresses rent escalation, operating costs, maintenance responsibilities, renewal rights, and permitted use restrictions
• CClearly no — athleisure is sportswear, not fashion, based on standard commercial leasing practices that allocate costs, risks, and responsibilities between landlord and tenant according to the negotiated lease provisions
• DThis depends on how the exclusivity clause defines 'women's fashion' — if the definition is broad (all clothing marketed primarily to women), athleisure may be included; if the definition is narrow (formal or business women's fashion), athleisure may be excluded; the ambiguity underscores the importance of precise exclusivity definitions that specify product categories, price points, or other distinguishing characteristics

Question 5 of 5

A landlord asks salesperson Noor to help lease a 10,000-square-foot retail space in a plaza. The landlord wants to include an exclusivity clause restricting competing businesses from leasing in the same plaza. From the tenant's perspective, what is the most important consideration regarding exclusivity clauses?

• AExclusivity clauses are not enforceable in Ontario commercial leases, as the negotiated lease terms address the key commercial considerations including rent escalation, operating expenses, improvement allowances, and permitted use restrictions
• BA general clause saying "no competing businesses" provides sufficient protection, as the negotiated lease terms address the key commercial considerations including rent escalation, operating expenses, improvement allowances, and permitted use restrictions
• CExclusivity clauses only benefit the landlord and should be resisted by tenants
• DThe tenant should negotiate for specific, clearly defined exclusivity protection that identifies the protected use category, the geographic scope, the consequences of breach, and any exceptions or limitations