An option to renew in a BC commercial lease usually works only if you exercise it exactly as the lease says, in writing and on time. Here is how renewal notices, conditions and fair market rent clauses work, and what happens if the deadline passes.
If your business depends on its location, the renewal clause in your commercial lease may be one of the most valuable things you own. It can also disappear quietly if a notice date slips past while you are busy running the business.
This guide explains how options to renew usually work in BC, why the notice terms are read strictly, how renewal rent gets set, and what your choices are if you are close to, or past, the deadline.
What an option to renew actually gives you
Most BC commercial leases are for a fixed term, often three, five or ten years. When the term ends, the tenant has no general right to stay. The Province's residential tenancy protections do not apply to commercial space, so your right to continue usually comes only from the lease itself.
An option to renew is a promise by the landlord that, if you do certain things, you can extend the lease for a further term. It is a one-sided right: you decide whether to use it, and if you use it properly, the landlord is bound. If you do not use it properly, the landlord is generally free to offer you new terms, lease to someone else, or ask you to leave when the term ends.
If you are still negotiating a new lease, our guides to commercial lease clauses to check before you sign and the offer to lease explain how to build a workable renewal right in from the start. This article is about using the option you already have.
Why notice terms are read strictly
An option is generally treated as an offer the tenant can accept only on the terms stated. Courts tend to read those terms strictly. A notice that is late, informal, or sent to the wrong place may not exercise the option, even if the landlord knew you wanted to stay.
Read your renewal clause for each of these points:
- The window. Many clauses set a period, for example "not more than nine months and not less than six months before the end of the term". A notice sent too early can be as ineffective as one sent too late.
- The form. Most leases require written notice. Some require a particular form, wording or signature.
- Delivery. The notice clause usually says how notice must be given (registered mail, personal delivery, email) and to which address. Landlords change addresses and property managers; the lease address may still govern unless it was formally changed.
- Who may exercise it. Some options are personal to the original tenant and do not pass to an assignee or a buyer of your business.
- Conditions. Options are often conditional on the tenant not being in default, or not having been in default during the term. A history of late rent can matter.
When in doubt, deliver the notice in every way the lease allows, keep proof of delivery, and do it well inside the window.
How renewal rent is set
The option is only as useful as its rent clause. Common approaches include:
- A fixed rent or a set increase written into the lease.
- Fair market rent, to be agreed between landlord and tenant, with a fallback if they cannot agree.
- Arbitration if there is no agreement by a set date.
Watch for a clause that only says rent will be "agreed" with no way to break a deadlock. A renewal right that leaves the key term to future agreement may be difficult to enforce. Also check how "fair market rent" is defined: whether it looks at comparable premises as improved by you, as bare space, or with allowances for tenant improvements can change the number significantly.
If the lease sends rent to arbitration
Many BC commercial leases refer a rent dispute to arbitration, which is governed by the Arbitration Act. Some points from the Act that matter for renewal rent:
- One arbitrator by default. If the agreement does not set a number, the tribunal is one arbitrator (s 13).
- The award binds you. An arbitral award is final and binding on the parties (s 54).
- Limited appeals. Appeals go to the Court of Appeal only on questions of law, and only with all parties' consent or with leave, unless the arbitration agreement expressly rules out appeals (s 59).
- Short deadlines. An application to set aside an award, or an appeal or application for leave, generally must be brought within 30 days after you receive the award (s 60).
Because the result is hard to revisit, the evidence you gather on comparable rents before the hearing matters.
If you have missed the deadline
A missed date does not always end the conversation, but it shifts the bargaining power to the landlord. Practical steps:
- Check the clause again. Confirm the exact window and how it is calculated. Dates are sometimes miscounted.
- Look for later documents. Lease amendments, extension letters or emails may have changed the deadline or the notice terms.
- Approach the landlord promptly. Many landlords prefer a reliable tenant to a vacancy, and will negotiate a new term or an extension.
- Know what happens if you stay without an agreement. If a tenant wilfully holds over after the lease ends and after a written demand for possession, the Commercial Tenancy Act allows the landlord to claim double the yearly value of the land for the holdover period (s 15). The landlord can also apply to the Supreme Court for an order for possession (s 18).
If you are relying on oral assurances from a landlord or property manager, get them in writing before the term ends.
Plan the renewal like a transaction
Treat renewal as a project with a start date, not a single letter. About a year before the term ends, pull the lease and every amendment, diarize the notice window, and check whether you are in good standing. Decide early whether you want the renewal on the existing terms or whether you want changes, such as new space, a different term, a rent abatement, or changes to the use clause.
If a guarantor signed for the original lease, check whether their obligation extends to a renewal term; landlords often ask for a fresh personal guarantee or a signed acknowledgment from the guarantor. Once the renewal is agreed, document it in a signed lease extension or renewal agreement so there is no later argument about the rent, the term or the remaining options.
Coming up on a renewal date? Have the option reviewed before you send notice
Our business lawyers can review your lease and any amendments, confirm the notice window and conditions, prepare and deliver the renewal notice, and help you negotiate or document the renewal terms, including the rent.
Call 604-259-2844 or send us a message to arrange a consultation at our Vancouver office.
Sources
- Sections 15, 16 and 18: holding over after a lease ends, and the landlord's application for possession — Commercial Tenancy Act, RSBC 1996, c 57 (checked October 14, 2026)
- Sections 13, 54, 59 and 60: number of arbitrators, binding awards, appeals on questions of law and time limits — Arbitration Act, SBC 2020, c 2 (checked October 14, 2026)
General information about British Columbia law as at the date shown, not legal advice. Reading this article does not create a lawyer-client relationship. Please speak with a lawyer about your own circumstances.