Press review of mid-June

Two legislative initiatives from the provincial government are attracting attention: Bill 31, tabled by the Minister responsible for Housing, and Bill 22, aimed at modernizing the 50-year-old Expropriation Act.

Par Corinne Laberge

Bill 31 on housing

The La Presse article "Québec veut s'attaquer aux cessions de bail" (Quebec wants to tackle lease transfers) covers the whole subject. Minister Duranceau's comments were reported: "It's not up to the tenant to control the rent increase for the next person (...) This business of lease transfers, or lease shopping between tenants, is an obstacle to landlords' property rights," she declared at a press briefing in Quebec City. "She believes that she is protecting landlords' right to negotiate by granting them the possibility of refusing a lease transfer without going through the Tribunal administratif du logement (TAL)."

However, "When it was first considered, this measure was intended to protect landlords from non-payment of rent in the event that a tenant decided to leave before the end of the lease", we read. CORPIQ's Director of Public Affairs, Marc-André Plante, points out that "it is the tenants who have hijacked the function of the lease assignment".

Under the heading "Supervising evictions", it is stated that "The burden of proof will shift to the landlord in cases where the tenant does not respond to the eviction notice". As a result, "the absence of a response will no longer be automatically considered as consent to eviction". He adds, "The same will apply when a landlord does not respect what he has stated in his eviction notice, particularly in the case of a repossession of a dwelling. The landlord will then have to "demonstrate that he acted in good faith". Furthermore, the compensation paid to evicted tenants will be enhanced, "i.e., the equivalent of one month's rent per year, depending on the number of years spent in the dwelling".

Aspects relating to Clause F are then detailed. "Landlords of new buildings are not required to set the tenant's rent for the first five years, and can demand increases that are higher than those provided for in the TAL. Clause F will still stand, but landlords will have to write their projected increases into the lease to avoid surprise increases," relates La Presse.

France-Élaine Duranceau explains that she "left it at five years because, in the current economic context, where we really need builders who make housing, there was no question of introducing a measure that would impose an additional burden on them in terms of risks to be assumed".

CORPIQ states in this press release that it "will conduct a complete review of the legislation in anticipation of the hearings that will take place in the coming weeks".

More responsibilities are transferred to the owner. "This is particularly the case for several situations that were problematic: evictions, section F of the lease and assignment of lease; all revised in favor of greater clarity and a better framework".

Section G of the lease remains a disappointment for CORPIQ, "considering that it raises a real issue of fairness in negotiations in the residential rental market". It allows tenants to go back on their decision once the lease has been concluded at an agreed price, "which runs counter to the transparency that underlies legal contracts", argues the organization.

"It is incomprehensible that a legal document imposed by the government includes a section that invalidates one of the main elements of the lease, the price, which was agreed by both parties. The government absolutely must review the provisions of Bill 31 in order to abolish Section G of the rental lease, otherwise it will continue to bog down the TAL and fuel bad relations between the parties," asserts the CORPIQ spokesperson. "We need to put an end to this situation, which is causing more problems than solutions to the housing crisis." 

With rental stock in need of renovation, a review of the rate of return for major improvements and the formula for calculating rent is also desirable. "This amendment to the by-law is absolutely necessary to reduce illegal evictions in the context of major renovations," observes Marc-André Plante.

CORPIQ will be making its views known at the parliamentary committee hearings on the bill this fall.

Expropriation bill  

Written by Philippe Mercure in La Presse, "La fin de la récréation pour les expropriations" highlights the case of a developer suing the Ville de Rosemère, the MRC and the Communauté métropolitaine de Montréal for $278 million for a former golf course valued at $13 million.

"How would you like to receive $4.5 million for land worth $2.6 million on the market? This is what is currently happening with owners who are "lucky" to be expropriated by the state. For some years now, the courts have been awarding them compensation that no longer bears any resemblance to reality."

Adding that the Legault government's bill to amend the Expropriation Act "promises to bring down to earth the stratospheric compensation currently awarded when the state has to displace people or businesses to protect a wetland, build an REM or run a power line."

The changes will help municipalities that "struggle to enforce their land protection obligations without embarking on a long, uncertain and costly process".

"The root of the current problems lies in the fact that the expropriated are not compensated based on the market value of their property, but according to the vague legal principle of "value to the owner" ", it reads.

The author argues that it has "become so attractive to be expropriated in Quebec that many owners now plead "disguised expropriations" when zoning changes affect their land, hoping for juicy compensation."

This other text from La Presse, written by Pierre Goudreau, President of the Ordre des évaluateurs agréés du Québec (OEAQ), is in response to Philippe Mercure's editorial.

The OEAQ is in favor of this reform to adapt the law. "The way in which compensation is established for expropriated property raises many questions, and must be aimed at achieving a fair balance (...) However, it is important to recall certain facts in order to balance the debate on this imminently sensitive subject. To assert that those expropriated in Quebec would have been in the midst of recreation and that we must "ring the end of the celebration for the expropriated" seems unfair to us," maintains Mr. Goudreau. "Ask homeowners if they really think it's winning the lottery to be expropriated, and they'll tell you they'd much rather keep their house or land."

Pointing out that "95% of expropriation and acquisition by mutual agreement cases, even before a notice of expropriation is issued, are settled by negotiation", he insists that "upstream procedures, rules and mechanisms are crucial to reducing the number of cases that end up in court". The OEAQ will issue recommendations to reduce this rate.

As for the cases that end up in court, "it's not true that the courts hand out compensation that has nothing to do with reality", he asserts. According to the Civil Code of Québec, Mr. Goudreau points out that "expropriated landowners are entitled to "just and prior compensation". In this case, "the exact equivalent of the thing expropriated that will enable the citizen affected by the expropriation to obtain something absolutely similar".

In closing, "The legal concept of "value to the owner" is not a fuzzy concept", points out the president. "The value of land that is established according to the principle of "the best and most profitable use that its owner could make of it" constitutes one of the most important principles that is at the heart of the standards of practice of the OEAQ, the Appraisal Institute of Canada and the international standards that guide appraisers."

CORPIQ once again plans to make representations during the fall consultations on the bill.