Whether your commercial lease agreement is 50 pages long or is set out in just one page, the legal relationship between landlord and tenant is governed not just by the terms and conditions of the lease agreement itself but also by certain provisions of the Civil code of Quebec. Among the provisions relating to contracts, Articles 1851 to 1891 of the Code deal specifically with commercial leases.

By law, tenant and landlord benefit from the rights or, depending on the perspective, are subject to the obligations provided for in these Articles unless the parties expressly exclude their application in the lease. In other words, in order for the Articles not to apply to a particular lease, the rights they provide must be expressly waived by the beneficiary of those rights, or the parties must have stipulated other terms dealing with the same subject matter.

1. Warranty with respect to the use of the leased premises on the second paragraph of Article 1854 of the Code, the landlord is bound to warrant to the tenant that the leased property can be used for the purpose for which it was leased and to maintain the leased premises for that purpose throughout the term of the lease. This warranty goes so far as to mean that the intended use of the leased premises complies with applicable zoning by-laws.

2. Peaceful Enjoyment. The landlord must ensure that the tenant is not disturbed in its right to peaceful enjoyment of the leased premises, and this obligation continues throughout the term of the lease (first paragraph of Article 1854 of the Code). The landlord is not liable, however, for damages resulting from the disturbance by a third party of the tenant’s enjoyment of the leased premises, unless the third party is also a tenant of the property or is a person whom the landlord allows to use or have access to the property (Article 1859 of the Code). If the tenant is disturbed by another tenant or by a person whom the landlord allows to use or have access to the property, the tenant can demand a reduction of the rent or the termination of the lease, if the disturbance is notified to the landlord and persists. The tenant may also recover damages from the landlord unless the landlord proves it acted with prudence and diligence (Article 1861 of the Code).

3. Nonperformance of an obligation Pursuant to Article 1863 of the Code, the nonperformance of an obligation by either party entitles the other party to apply for: damages; or damages and specific performance; or termination of the lease, where the nonperformance causes serious injury to such party or to the other occupants. The nonperformance by the landlord of an obligation also entitles the tenant to apply to the court for a reduction of rent; if the court grants it, the landlord is entitled to reinstate the original rent for the future once the default is remedied.

4. Assignment and subletting a tenant may sublease all or part of the leased premises or assign the lease. In either case, the tenant must give notice of its intention to the landlord along with the name and address of the intended subtenant or assignee, and must obtain the landlord's consent, which cannot, however, be withheld without a serious reason. If the landlord refuses consent, it has to inform the tenant of the reasons for doing so within 15 days after receiving the tenant’s original notice; otherwise, the landlord is deemed to have consented to the sublease or assignment (Articles 1870 and 1971 of the Code).

A landlord may consider that it is appropriate to require additional information on proposed subtenants or assignees, add additional conditions to a sublease or assignment, provide for other delays for a response, or prefer not to have to justify a refusal; if so, such terms and conditions must be set out specifically in the lease. As for expenses, the landlord can only require the reimbursement of reasonable expenses related to a sublease or assignment (Article 1872 of the Code). Unless otherwise provided in the lease, in the case of an assignment, the original (assigning) tenant will be released from all its obligations under the lease (Article 1873 of the Code). This is not the case for a sublease.

5. Tacit renewal of the term A lease is renewed tacitly if the tenant continues to occupy the leased premises for more than 10 days after the lease expires and there has been no opposition from the landlord. In such circumstances, the lease is renewed for one year (or for the term of the initial lease, if the initial term was less than one year) on the same conditions (Article 1879 of the Code). For this reason, commercial leases often provide that if the tenant continues to occupy the leased premises after the expiry date of the term, the tenant will be considered to occupy the leased premises on a month-to-month basis and an overhead rent (150% of the rent provided under the lease, for example) will be payable. It should be noted that any security given by a third party to secure the performance of the obligations of the tenant does not extend to a renewed lease (Article 1881 of the Code).

 6. Termination of the lease a tenant against whom proceedings for termination of a lease are brought for nonpayment of rent can avoid the termination by paying the rent due, together with costs and interest, before judgment is rendered (Article 1883 of the Code). Although Article 1883 of the Code is considered to be of a public order nature (which would mean that the right it gives cannot be waived in the lease by the tenant), many commercial leases provide for a renunciation by the tenant of the application of Article 1883 of the Code. 7. Surrender the leased premises is worth mentioning that on termination of the lease, the tenant is bound to surrender the leased premises in the condition in which they were received, except for normal wear and tear and force majeure (Article 1890 of the Code). 8. Right to set-off Article 1672 of the Code stipulates that where two persons are reciprocally debtor and creditor of each other, the debts for which they are liable are automatically extinguished by compensation, up to the amount of the lesser debt. In order, therefore, to keep the rent flow intact throughout the term of the lease, landlords usually specifically state in the lease that payment of the rent (basic and additional) is deemed to be made without any set-off, compensation, diminution or reduction whatsoever.


©  LOCAL A LOUER | LOCALALOUER.NET | 390, Henri-Bourassa Ouest | bureau 300 | Montréal H3L 2T5 | 514.808.0185 |