Commercial rent squeeze

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We’ve written extensively about a housing crisis in Haliburton County. The high cost of rent has contributed. 

However, we have not delved into the commercial side of things. Yet, we are seeing landlords being forced to raise their rents to cope with the inflationary pressures we are all experiencing. We are also witnessing commercial properties remaining vacant because would-be tenants cannot afford the rents.

In today’s Highlander, we look into concerns over a landlord increasing rents at a Minden commercial building that houses the Shell as well as Fast Lane Bowling, Pet Thyme-Animal Krackers! and Sonya’s Unisex Hairstyling. The roofing business no longer appears to be in the complex. The owners of the bowling alley told us they were informed earlier this month that their rent would be going up 140 per cent in the new year. 

They said the hike would force them to close. A GoFundMe has been launched in the hopes of getting them through the winter season, but is obviously not sustainable long-term. While it would be easy to vilify the landlord, it isn’t black and white. The landlord told us he didn’t want to up the rents, but he had no choice. 

He said the rent had not been raised by the former landlord and was far below market rent. It’s hard to figure out an average for Minden Hills as rents vary based on square footage and other factors. 

For example, if you look on realtor.ca, there is a small sample size. But it would indicate that the landlord was undercharging. The landlord’s costs are going up too. He has experienced seven Bank of Canada interest rate hikes in six months. 

He is looking at paying an additional $800-a-month in mortgage payments. We understand the tenants’ concerns, too. Big rent hikes will undoubtedly ruin their bottom line, or worse, force them out. 

Right or wrong, less government protection is afforded commercial renters. 

Even though there are a few commercial rent increase guidelines in Ontario established by the Commercial Tenancies Act, rents are mostly determined by the market rates and negotiations between landlords and tenants. And, legally speaking, there’s no limit on how much a landlord can increase the rent by every year. However, we do urge the landlord to take into consideration the tenants’ business and the economy. 

We know that business revenue at a bowling alley varies. It’s busy in the winter and dead in the summer. He is also gambling in terms of trying to balance the need to retain the tenants with their capacity to pay. That’s why we see empty shops in our villages. 

We encourage the landlord to negotiate with the tenants, which seems to be happening now. It would be ideal if the landlord can reach a win-win with the tenants. In this case, the landlord lives out of town so doesn’t know the impact of a closure of a bowling alley. 

With four leagues, including Special Olympics, open bowling, and parties and fundraisers, Fast Lane is an important part of our community. 

We urge all commercial landlords in the County to add an escalation clause to their lease agreements – in talks with their tenants. It gives them the right to increase the rent when the cost of operating the property goes up. That way the increase is considered fair, and not in the 75-150 per cent range as in this case.