Will tenants leave on time at the end of their lease?

As July 1 approaches, several issues are complicating an already difficult situation arising from the health crisis.

In addition to the scarcity of available dwellings, there is the significant delay in the re-rental process, the paralysis of the Régie du logement, the ministerial order prohibiting all evictions, the confinement, the difficulty of making visits, the loss of jobs for tenants who have already signed a lease, the students who will no longer have to live close to the University or CEGEP to follow their courses, etc. In addition to the vacancy rates just published by CORPIQ, its May survey reveals other interesting findings.

In the second week of May, one third of landlords had at least one unit currently occupied, but to be re-rented since the lease has not been renewed. Of this number, 21% are concerned that all or some of their tenants, who must leave, will not vacate the premises on the planned date, and this without authorization.

Nearly two third of landlords (61%) have already spoken with their tenants who are about to vacate, 12% have spoken with only some of their tenants and 27% have spoken with none of their tenants. Of those who have spoken with all their tenants, 15% are concerned that one or more of them will not leave on time. Among landlords who have not spoken with any of their tenants, 18% are worried that one or more of their tenants will not leave on time (82%).  On the other hand, 56% of those who have spoken to only some of their tenants are worried. It is assumed that they have spoken with their most at-risk tenants.

Usually, it takes about three weeks for the Régie to hear a case involving an occupant that remains on the premises after the lease expires. It is impossible to know how long it will take this year to call the parties together and hold a hearing.

The government has already indicated by ministerial order that the Régie has the power to hold hearings and order the eviction of an unentitled occupant if a new tenant must move into the dwelling under a lease signed before March 17. However, if the tenant files a retraction request against such a judgment, his or her request will likely not be heard before the end of the health crisis. Therefore, the occupant without rights is not worried in the short term. Eventually, he could be required to reimburse the damages he has thus created.

Temporary Accommodation Support Program

A majority of landlords are opposed to extending the end of leases, notes CORPIQ. The Quebec government has chosen not to go down this road and has instead announced a financial assistance program for those who would need to temporarily relocate, if they are unable to move into their new dwelling on the planned date because of the pandemic. The Financial support for households awaiting their residence (property or dwelling) provides $75 per day of temporary accommodation for a maximum of $4,000, plus a maximum of $1,000 for storage.

CORPIQ was pleased with this announcement. Already in April, 74% of landlords said that if a tenant did not leave his or her dwelling at the end of the lease, it would pose a serious problem that would be difficult, if not impossible, to solve.

Not having found a place to to take up residency will not be an acceptable excuse in court for occupants without rights after the end of their lease. With the Temporary Financial Support Program, tenants can even sign a lease starting later this summer and stay in a hotel in the meantime. The cost will be less than compensation for preventing the new tenant from accessing their unit.

The CORPIQ survey reveals that 12% of landlords expect at least one new tenant in June, 33% in July and 3% in August or later.

Low tenant turnover rate

The situation is aggravated by the scarcity of vacant or occupied but soon-to-be-available housing. Indeed, the turnover rate (of tenants) in Quebec's housing stock was 18.6 % in 2018 and 17.2 % in 2019, according to CMHC, a sign that fewer tenants change addresses when vacancy rates are low. The City of Montreal's advertising campaign in February, encouraging tenants to renew their leases and to contest rent increases, will probably have favoured the sedentary behaviour of tenants in 2020 in the region where there are the most rental units in Quebec. The turnover rate will be known at the end of the year.

Do you believe that your tenants, whose leases are ending, will leave on the scheduled date?