A Rental Registry Would Have Serious Consequences for Tenants Too

Montreal, June 9, 2021 - Following the declarations of housing activists who are calling for the implementation of a public rent registry, CORPIQ condemns this idea which, if it were to become a reality, would cause damage to all tenants and would ultimately help only a small minority of them in the short term.

A registry alone is useless, says CORPIQ, but the problem lies in the fact that the Civil Code of Québec allows a new tenant to have his or her rent set by the court if he or she knows the old rent. He is therefore reneging on the main clause of the contract that he has just accepted and signed in bad faith. He thus deceives the landlord.

"One may know the previous transaction amounts for a residential property, but this does not give a new buyer the right to have the price revised downwards after going to the notary. There is no justification for this to be different for rents", says Hans Brouillette, Director of Public Affairs for CORPIQ.

CORPIQ is asking the Minister of Housing, Andrée Laforest, to undertake the abolition of this recourse which tries to set the rent for a new lease. It also asks her to clearly state that a rent registry is not acceptable, not for reasons of technical or financial feasibility, but for a matter of principle, i.e. stability of the contractual relations that govern the relations between the parties:

"It makes no sense to allow a rent to be perpetuated from tenant to tenant that would be, for example, 30% to 50% below the break-even value. Nor is it acceptable for a landlord who spends $50,000 to refurbish an old unit that has become vacant to be bound by the old rent. In both cases, the government is forcing duplex and triplex owners to subsidize the new tenant. The minister must act", says Brouillette.

Consequences For Tenants

In addition to the harm caused to landlords, CORPIQ sees several reasons why tenants themselves should fear the introduction of a rent registry:

1.       It would perpetuate the inequity between tenants of the same building, since those who have a higher rent must assume more than their fair share of the increases in expenses (taxes, insurance, work on the building) than those who have kept their rent low thanks to a judicial fixing of the rent.

2.       Any new tenant who reneges on the lease by filing a fixing of the rent application has his or her name entered in a public judgment. When he or she moves out, he or she may have a harder time convincing a landlord to rent to him or her.

3.       It would cause a greater scarcity of housing, as landlords would prefer to keep the unit vacant for twelve months, to avoid rent control, rather than risk the fixing of the rent by a new tenant. The lack of rental income for a year would be more than quickly made up with the new price.

4.       The unreliability of a registry to compare rents or included services (appliances, internet, air conditioning) could defeat the tenant's rent setting appeal.

5.       Once a registry is in place, individuals would attempt to identify housing with the highest value relative to the low rent paid, and then attempt to "convince" vulnerable tenants to surrender the lease and leave. Once taken, these types of housing would never become available on the market again. They would likely be sublet for more money.

"What we have seen as a sham rent registry, funded by these boroughs run by Projet Montréal elected officials, has no credibility. Anyone could register any rent at random building addresses", said CORPIQ spokesperson. "Even relying on a paper lease offers no certainty. Anyone can buy a lease form, fill it out and send it with false information to the private administrators of a pseudo-registry."

In closing, it should be noted that rents in Quebec are the lowest in Canada. The average rent represents 22.5% of the annual after-tax income of Quebec tenant households, a clear improvement over the past 25 years, compared to 28% for tenants across the country, including the influence of Quebec. Affordability is therefore better in Quebec. In 2020, Quebec was among the three provinces where renters had the least difficulty paying their rent during the pandemic.