Document background
The Commercial Lease Option Agreement is a strategic document used in Canadian commercial real estate transactions when a potential tenant requires time to evaluate a property or secure financing before committing to a full lease agreement. This document is particularly valuable for businesses planning expansion, entering new markets, or requiring due diligence periods before committing to a lease. The agreement typically includes detailed terms about the option period, exercise requirements, consideration paid, and the fundamental terms of the proposed lease. Under Canadian law, these agreements must comply with provincial property legislation and common law principles, and they often require registration in the relevant land registry system. The Commercial Lease Option Agreement provides protection for both the landlord, who receives consideration for keeping the property available, and the potential tenant, who gains exclusive rights to lease the property under agreed terms.
