An Edmonton business owner says stronger protections and clearer rules are needed for small businesses in commercial lease agreements.
Nylla Moroziuk said she got notice this summer that she’d have to move her store, Rain Clothing and Fashion Accessories, from its current spot in Phase 1 of West Edmonton Mall.
She knew it was a possibility — a relocation clause is part of her lease, letting the mall give her 60 days’ notice to move to another spot. She said she was told that a larger retailer would be taking her space, plus some neighbouring stores.
But Moroziuk said she’s just one year into her five-year lease agreement, and she’s frustrated that she doesn’t see a way to guarantee more stability for her location. Shops are often subject to 30-day relocation clauses, and she said that uncertainty can put independent business owners at a landlord’s mercy.
“When you’re looking at a small business … that 30 days could completely change somebody’s life,” she said.
West Edmonton Mall didn’t respond to a request for comment from CBC News.
Moroziuk said the issue isn’t her current landlord, but the broader leasing system. She started a petition this month to call for the Alberta government to create a commercial leasing act, with guidelines and standards for lease agreements.
Nylla Moroziuk has run Rain Clothing and Fashion Accessories for a decade, first in Bonnie Doon Mall, and now in West Edmonton Mall. (Submitted by Nylla Moroziuk)
Moroziuk argues it could help correct what she says is a power imbalance between commercial landlords and small businesses.
“I don’t think a lot of Albertans understand what small business owners have to go through to be able to lease in our shopping centres, or lease at all,” she said.
“With rising prices and job instability, small retailers are already facing so many struggles that this has just definitely come to the forefront.”
Alberta’s Residential Tenancies Act sets the framework for the residential landlord-tenant relationship, but there isn’t equivalent legislation for businesses renting space for a brick-and-mortar shop.
Alberta isn’t the only province where this is the case, but in Ontario and B.C., there are laws that specifically govern commercial tenancies, outlining some of the rights and obligations on both sides.
In a statement to CBC News, a spokesperson for the Ministry of Service Alberta and Red Tape Reduction said the provincial government isn’t looking to follow suit.
“The Alberta government does not currently plan to establish legislation to govern commercial tenancies. Commercial tenancies are ultimately governed by contract law in Alberta,” Andrew Hanon said.
He added that small businesses can contact a commercial leasing broker to help them with the process, or find other supports through partner organizations like Business Link.
Different approach to commercial, residential agreements
CBRE Limited regional managing director Greg Kwong said relocation clauses are fairly standard for leases in shopping centres across Canada, unless the business is a large “anchor tenant” that needs a significant amount of space.
“As a smaller company, smaller retailer, it’s pretty difficult to negotiate out some of these clauses,” he said.
“It’s to give the landlord a right to make sure that the mall is fairly full, which ultimately is in the best interest of all the tenants.”
Kwong said he always recommends commercial landlords and tenants get good legal counsel while they’re negotiating a lease.
Commercial leasing has fewer laws around it, he added, because of how it’s viewed differently than the residential rental process. For commercial leases, the landlord and tenant are generally viewed as business people who can look out for themselves, while in the residential space, tenants might not know all the rules, and could need protection from potentially unscrupulous landlords.
But Moroziuk said small businesses aren’t on equal footing with the companies they rent space from, and she plans to keep advocating.
“I think it’s time for change. A lot of business owners that I talked to are really scared to speak up,” she said.
“So at this point I’m standing up not just for my store but for every small business owner in Alberta.”