Developers have 90,300 office-to-apartment units in the pipeline in the U.S. as of early 2026, up 28% from a year earlier and nearly four times the 2022 total.[1] CBRE separately clocked a record 1.5 million square feet of office space pulled from inventory for residential conversion in a single quarter.[2] That building boom runs through leases signed years before anyone planned to gut the property, and most of those leases have a demolition or redevelopment clause nobody negotiated hard over at signing, because nobody thought the landlord would ever actually pull the trigger.
A demolition or redevelopment clause that conditions lease termination on the landlord having obtained “all requisite permits” does not treat a demolition plan, a construction schedule, or even work that has already started as satisfying that condition; it requires the actual permit for the actual stage of work described in the notice, in hand, by the deadline the lease sets, and two Ontario Court of Appeal panels sitting ten months apart both held landlords to exactly that standard.
A landlord’s plan to remodel and demolish wasn’t enough to prove the tenant’s possession was “impracticable.” In Meridian C.C. Intl. Inc. v. 2745206 Ontario Inc., the lease let the landlord terminate on 180 days’ notice if it wanted to remodel or demolish “to the extent that continued possession by the tenant” was impracticable. The landlord gave notice, planning to tear out a garage, remodel the main floor into separate units, and replace the windows, wiring, and plumbing. The tenant argued its business, which used only half the main floor, wouldn’t actually be disrupted. The motion judge granted the landlord summary judgment anyway. On January 12, 2022, a three-judge panel of the Court of Appeal for Ontario set that judgment aside and sent the case back for trial, holding that whether the renovation actually rendered possession impracticable was a live factual dispute, not something a landlord’s stated intentions could resolve on a motion.[3]
Ten months later, a different panel killed a demolition notice over one missing permit. Bennett Law Chambers Professional Corporation v. Camcentre Holdings Inc. turned on a clause requiring that “such termination shall not be effective unless at the end of the notice period the Landlord shall have obtained all requisite permits and authorizations for the commencement of such redevelopment, reconstruction or demolition.” The landlord served notice on October 31, 2019, and set an April 30, 2020 vacant-possession deadline. By then it had started asbestos abatement, a mandatory precondition to demolition that needs no municipal permit on its own, but it had not obtained an actual demolition permit. Writing for the majority on September 22, 2022, Justice Feldman held that “commencement” of demolition meant the step for which a permit is actually required, not the asbestos work that happened to come first, and that reading the clause the landlord’s way would let it terminate without ever showing the permit the clause was written to demand. The notice failed. The lease stayed in force, and the tenant got $15,000 in costs.[4]
The same judge sat on both panels and landed on opposite sides. Justice L.B. Roberts joined the unanimous panel that revived the tenant’s case in Meridian. In Camcentre, she dissented, arguing the application judge’s finding that asbestos abatement wasn’t the start of demolition had no evidentiary basis, and that a landlord who had genuinely and imminently begun tearing the building apart shouldn’t lose its termination right over a permit for a later stage nobody had reached yet.[4] Two cases, one appellate judge, two different results on what a demolition clause actually requires. That split is a fair description of where this area of law sits right now: unsettled enough that a landlord who thinks a signed contractor and a torn-out ceiling proves its point should not assume a court will agree.
Clauses that sat dormant for decades are the ones now getting tested. Most demolition and redevelopment clauses in office and retail leases were written as a backstop nobody expected to use, boilerplate carried forward lease renewal after lease renewal. The RentCafe and CBRE numbers above describe a market where that backstop is suddenly load-bearing: landlords who need vacant possession to convert a half-empty office tower or reposition a struggling retail box are reaching for a clause that was last read closely, if ever, by whoever drafted it.
The fix, per the lawyers who’ve now litigated this twice, is procedural, not creative. Commentary on both rulings converges on the same advice: get the actual permit, even a conditional one, before the notice period runs out, don’t rely on a related but distinct construction stage to stand in for it, and match the language in the termination notice to the language in the lease rather than paraphrasing.[5] Neither case turned on whether the landlord’s redevelopment was real. Both turned on whether the landlord had the specific document the clause named, on the specific date the clause named.
A demolition clause and a condemnation clause both end a tenancy for a reason that has nothing to do with anything the tenant did wrong, but they sit on opposite sides of who has to prove what. A condemning authority’s power to take the property isn’t in question, so the fight moves to dividing up the award. A landlord’s power to terminate for demolition is exactly what’s in question, and Meridian and Camcentre both show that fight gets decided on the paperwork the landlord did or didn’t have on a specific day.
Tracking a precondition the lease already wrote down#
Acrebase’s clause extraction reads a demolition or redevelopment clause and flags the specific precondition it sets, permit obtained, notice period run, vacant possession date, so a landlord’s counsel can check the file against the calendar before a notice goes out, not after a tenant’s lawyer does it for them in court. Its clause library also lets a firm compare how “commencement,” “substantial,” and “requisite permits” get defined across every ground lease and office lease in a portfolio, so redevelopment counsel isn’t relying on whichever version of the boilerplate happened to survive the last renewal.
If you are a landlord, don’t serve a demolition or redevelopment notice until the specific permit your lease names is issued, not applied for, not likely, not a permit for an earlier construction stage that happens to have started first. If you are a tenant facing one of these notices, read the precondition language against the actual date the landlord claims to have satisfied it. Two Court of Appeal panels have now found the gap between “planning to demolish” and “having the permit to demolish” wide enough to keep a lease alive.
Footnotes
[1] RentCafe (Yardi), cited in CRE Daily, “Office Conversions Hit 90K, Boosting Adaptive Reuse” (March 25, 2026) — 90,300 office-to-apartment rental units in the U.S. pipeline as of early 2026, a 28% year-over-year increase and nearly four times the 2022 total. https://www.credaily.com/briefs/office-conversions-hit-90k-boosting-adaptive-reuse/
[2] CBRE research, cited in reporting on 2026 Q1 office conversion activity — record 1.5 million square feet of office space removed from inventory for residential conversion in a single quarter; separately, roughly 23.3 million square feet of U.S. office space was in process of conversion or demolition as of mid-2025. https://www.facilitiesdive.com/news/us-office-conversion-projects-could-be-up-63-this-year-cbre/733901/
[3] Meridian C.C. Intl. Inc. v. 2745206 Ontario Inc., 2022 ONCA 12 (Jan. 12, 2022), panel of Rouleau, van Rensburg, and Roberts JJ.A. — appeal allowed, summary judgment set aside, matter remitted to trial on whether proposed renovations rendered continued possession by the tenant impracticable under the lease’s demolition/remodel termination clause. https://www.ontariocourts.ca/decisions/2022/2022ONCA0012.htm
[4] Bennett Law Chambers Professional Corporation v. Camcentre Holdings Inc., 2022 ONCA 658 (Sept. 22, 2022), Docket C69578, majority reasons by Feldman J.A. (Favreau J.A. concurring), Roberts J.A. dissenting — Notice of Termination under a “Termination by Demolition” clause held ineffective for want of “all requisite permits and authorizations for the commencement of” demolition; asbestos abatement, requiring no permit, did not constitute commencement of demolition. https://www.ontariocourts.ca/decisions/2022/2022ONCA0658.htm
[5] Miller Thomson LLP, “Dealing with redevelopment clauses in commercial leases” and related commentary on Camcentre, “Landlord Redevelopment Rights 2.0 – The Details Continue To Matter!” — advising landlords to obtain a conditional permit before a notice period expires, avoid relying on a preliminary construction stage to satisfy a permit precondition, and match notice language precisely to the lease’s termination clause. https://www.millerthomson.com/en/insights/real-estate/dealing-redevelopment-clauses-commercial-leases/
Acrebase is AI-powered contract intelligence for commercial real estate — clause extraction, risk flagging, and portfolio-wide search, plus tools for maintaining a consistent clause library and negotiation playbook across every deal a team runs. Learn more at acrebase.com, or get in touch about pricing.