Cam Appleton | Relocation clause: Vancouver Commercial Real Estate Encyclopedia

For example: A tenant negotiates limits on relocation. (Illustration only, not a real deal.)

This is a general industry term with no single official definition. Your lease or contract wording controls.

Example only, not a real client. Say you lease a small office and your lease lets the landlord move you elsewhere in the building. A larger tenant wants your floor. Because we limited the clause, the landlord must offer comparable space, pay your moving and fit-out costs and give you three months’ notice, and you can end the lease if the new space does not work.

What I’d tell a friend

If you cannot remove a relocation clause, put limits on it. The time to do that is before you sign.

Why it matters to you

A move can cost you customers, signage and the build-out you paid for. If you can't remove the clause, limit where you can be moved and make the landlord pay the full cost of the move.

How to use it in your deal

Tenants should resist the clause or limit it: comparable size, location, visibility and quality; the landlord pays all moving and fit-out costs; reasonable notice; no more than once; not during peak season; and a right to terminate if you don't like the new space. Retail tenants should insist on similar frontage and signage. Landlords should keep the clause clear and fair to avoid disputes.

Buyers should know which leases include it, because it's a useful tool for re-planning a floor or a centre. Think about the business costs beyond moving boxes: new letterhead and signs, updated listings online, telephone and internet changes, and lost sales during the move. Ask that the landlord cover these, and that rent for the new space be no higher, even if it's larger.

A clinic or lab with expensive fixed improvements should ask to be exempt entirely, since rebuilding them may be impractical. Owners using the clause should give generous notice and work with the tenant's schedule; forcing a move rarely ends in a renewal.

Mistakes I see

Accepting broad wording like "any premises in the building". No coverage for indirect costs. No termination right. Allowing a rent increase on relocation. Forgetting improvements that can't be moved.

In BC and Vancouver

The lease controls; BC courts enforce relocation clauses as written, so the wording at signing is what matters.

Official sources: CanLII (court decisions)

Why landlords want it

Landlords use relocation clauses to keep flexibility, often so they can lease a larger block of space to a bigger tenant. From their side it is a reasonable tool.

From your side, a move costs money, time and sometimes customers. For a business that depends on a specific spot, such as a corner storefront, the clause can matter a great deal.

Limits worth asking for

Ask that the new space be comparable in size, quality and visibility, that the landlord pays moving, fit-out, signage and printing costs, and that rent does not go up.

Ask for long notice, no moves during your busy season, a limit of one relocation and the right to end the lease instead. Check with a BC lawyer on the wording.

Questions to ask before you sign

When can I be moved?
Where to?
Who pays?
Can I say no?

Keep reading

Related terms: Demolition clause

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General information for British Columbia only. It isn’t legal, tax, accounting or financial advice, laws and rates change, and reading it doesn’t make you my client. Any numbers or scenarios are hypothetical. Check the linked official source and talk to a lawyer, accountant or other qualified professional before you act or sign anything. See the terms and disclaimer.