Bill 31: what are the implications for landlords?

With the enactment of Bill 31, many questions remain about its practical application. In order to provide you with some clarification, CORPIQ has prepared a series of frequently asked questions, exploring some of the most significant repercussions of Bill 31 on the rights and responsibilities of real estate owners.

Let's take a look at some of the most noteworthy concrete changes introduced by this law, including new rules for lease assignment, changes to clauses G and F, implications for evictions, rules for representation at hearings and the jurisdiction of the Tribunal administratif du logement. What are the main changes brought about by Bill 31, and how do they affect the rights of tenants and landlords? Enjoy your reading!

Bill 31 introduced significant changes in the area of lease assignment. From now on, a landlord has the right to refuse an assignment of lease without giving any reason. This will have the effect of releasing the tenant from his obligations. In addition, the new law stipulates that tenants may not assign or sublet leases for profit. These adjustments are designed to preserve tenants' right to leave during the term of their lease, while allowing greater flexibility for landlords.

 

How does the lease transfer process work now that Bill 31 has been passed?

When a tenant wishes to assign his or her lease, he or she must inform the landlord in writing and provide the necessary details about the potential new tenant (assignee), including name and address, as well as a new feature of the new law: the planned date of assignment. This date must take into account the 15-day period available to the landlord to decide whether or not to accept the assignment. Upon receipt of this notice, the landlord has 15 days to respond to the transfer request, failing which he is deemed to have accepted. During this period, the tenant retains his rights and obligations under the lease. The landlord, for his part, may take advantage of this period to carry out a pre-rental screening of the prospective assignee. If the landlord accepts the lease assignment, the assignee will replace the former tenant on the existing lease, with the same terms, conditions and rent from the date of the assignment. In accordance with the Civil Code of Québec, the Landlord may require reimbursement of reasonable costs incurred by the former tenant in connection with the assignment only when the Landlord consents to the assignment.

So, what's different? Bill 31 now allows the landlord, upon receipt of the written notice of assignment from the tenant, to refuse the assignment without any serious reason. This will have the effect of terminating the lease by operation of law, without charge, on the date stipulated in the notice of assignment.

Furthermore, Bill 31 explicitly prohibits assignment and subletting "for profit". Indeed, the law now clearly states that a tenant who wishes to assign his or her lease may not demand any consideration.

 

What changes does Bill 31 bring to subletting?

Article 1944 of the Civil Code of Quebec provides that the landlord may send a notice of non-renewal of the lease to the tenant, when the latter has sublet the dwelling for more than 12 months. Prior to the application of Bill 31, the tenant had to apply to the Tribunal administratif du logement (TAL) within one month of receiving the notice to contest the validity of the notice, failing which he was deemed to have agreed to leave at the end of his lease. Now, there is a presumption of refusal to vacate the premises if the tenant does not respond to the notice of non-renewal within one month of receipt. This reverses the burden on the landlord, who has to open an application to the TAL within one month of the tenant's refusal (whether in writing or resulting from his silence) to avoid renewal of the lease. If the landlord fails to do so, or misses the deadline, the lease will be automatically renewed on the same terms as the last term.

Bill 31 also prohibits subletting for profit. This means that the tenant may not sublet for more than the rent he pays himself, except for services and reasonable charges for the use of goods included in the dwelling. Positively, this reinforces clause B of the lease, which states that the dwelling is rented for residential purposes only. A tenant should not be able to profit from an assignment or sublease.

 

How does Bill 31 modify compensation for eviction due to demolition, substantial enlargement, subdivision or change of use?

Bill 31 brings significant changes to eviction compensation for landlords. Prior to Bill 31, landlords wishing to evict a tenant for demolition, substantial enlargement, subdivision or change of use were required to compensate the tenant for the equivalent of 3 months' rent and reasonable moving expenses, regardless of how long the tenant had lived in the dwelling. From now on, for evictions notified on or after February 21, 2024, landlords are required to compensate tenants according to a specific formula. This formula provides for reasonable moving expenses and compensation equivalent to one month's rent for each year of uninterrupted tenancy, with a minimum of 3 months and a maximum of 24 months.

 

How does the reversal of the burden of proof affect owners during evictions?

Before Bill 31 came into force, it was up to the tenant, within one month of receiving the eviction notice, to file an application with the Tribunal administratif du logement (TAL) to oppose the eviction. If he failed to do so and the time limit expired, he was deemed to have agreed to leave and had to vacate the dwelling at the end of his lease. With Bill 31, the burden of proof is reversed, meaning that if the tenant does not respond within one month of receiving the notice, his silence is equivalent to a refusal. In the event of a refusal, whether in writing or as a result of the tenant's silence, it is now up to the landlord to lodge an application with the TAL within one month of receiving the refusal, to demonstrate that his project is legitimate and justified. The aim of these new rules is to standardize procedures at the TAL, with the procedure for evictions now identical to that for repossessions, making the whole process more harmonious and avoiding confusion.

 

What does Bill 31 do for Clause F of the lease?

With regard to clause F of the lease, it is important to remember that this clause must be properly completed in order to be applicable. In fact, if the rented dwelling is located in a building that was built 5 years ago or less, or whose use for residential purposes was the result of a change of use 5 years ago or less, the landlord and tenant cannot, during this period, apply to the Tribunal administratif du logement for a rent adjustment when the lease is renewed. With the coming into force of Bill 31, this clause and the rights attached to it are now even more binding. Indeed, all new leases where the building has become ready for its intended use after February 21, 2024 will now also have to indicate the maximum rent that may be imposed on the tenant in the 5 years following the date on which the building is ready for its intended use. This measure is designed to ensure greater predictability and stability for tenants entering into this type of lease.

 

 

What does Bill 31 stipulate regarding Clause G of the lease?

For all leases entered into on or after February 21, 2024, a landlord who enters false information in the notice to the new tenant, or who knowingly fails to give this notice, may now be ordered to pay punitive damages at the tenant's request. When the amount is entered, the tenant has 10 days following signature of the lease to file a rent-setting application with the Tribunal administratif du logement (TAL). Where the lease contains no clause G, the tenant has 2 months from the start of the lease to apply for a rent adjustment. In addition, if the tenant learns that the landlord has entered a false or erroneous amount, he or she will have 2 months from this discovery to lodge an appeal with the TAL.

 

How do the consequences change for homes made unfit for habitation by the owner's negligence?

For all claims opened by a tenant concerning a dwelling unfit for habitation after February 21, 2024, the tenant may now ask the Tribunal administratif du logement to order the landlord to pay punitive damages, in addition to the damages actually incurred, when the dwelling has become unfit for habitation due to the landlord's negligence. To minimize the damages to be paid, it is essential to keep clear and unequivocal proof of what has made the dwelling unfit for habitation (expert reports, photos, witnesses, etc.). A strong recommendation to landlords is to carry out site visits at least once or twice a year, to keep an eye on future work and to ensure that the tenant is maintaining the property properly. It's also good practice to make an inventory of fixtures during these visits. This minimizes the surprises and ensures better management of rental property maintenance.

Important : Please note that CORPIQ offers a sample condition report in the sample letters and forms available on our website.

 

What changes does Bill 31 bring to representation at a hearing before the Tribunal administratif du logement?

Before Bill 31 was passed, the rules governing representation before the Tribunal administratif du logement were more restrictive, both for an owner who is a natural person and for an immovable property owned by a legal entity. For all claims filed on or after February 21, 2024, the law now allows parties to be represented by any person they choose. The only restriction is that it is not possible to be represented by a professional who has been struck off the roll, declared unfit to practice his or her profession, or whose right to practice professional activities has been restricted or suspended. If a party is represented by a mandatary other than a lawyer, the mandatary must provide the Tribunal with a written mandate, signed by the person he or she represents. A table summarizing who can represent you at a TAL hearing can be found here.

 

Where does Bill 31 modify the jurisdiction of the Tribunal administratif du logement?

With the coming into force of the new law, the Tribunal administratif du logement now has jurisdiction up to the order of $100,000, an increase of $15,000. Previously, the TAL's jurisdiction was $85,000. The Tribunal can now issue orders for specific performance under articles 1863 (non-performance of an obligation causing serious prejudice), 1867 (landlord fails to carry out repairs or improvements to which he is bound), 1917 (dwelling unfit for habitation) and 1918 (landlord's obligations with regard to the condition of the dwelling to prevent it from becoming unfit for habitation) of the Civil Code of Quebec, the value of which exceeds the upper monetary limit of the concurrent jurisdiction of the Court of Quebec, which is set at $100,000.

In addition, when several claimants join or are represented by the same person in the same claim, the Court has jurisdiction, provided that the amount of each claim individually does not exceed $100,000.

 

What should I look out for when appealing a Tribunal decision?

Before Bill 31 came into force, a party wishing to appeal a decision of the Tribunal administratif du logement to the Court of Quebec had to do so within 30 days of signing the decision. Following its application, this 30-day period begins as soon as the party becomes aware of the decision. It is therefore important to pay attention to this new detail, which may affect the outcome of the appeal.

In addition, the new law stipulates that a decision of the Tribunal which has been the subject of an appeal rejected by the Court of Quebec is enforceable 10 days after the date of notification by the Court, unless the Court decides otherwise.