Bill 31 reminder for sections F and G of the lease

The implementation of Bill 31 has led to a number of changes affecting your rights and duties as a landlord. Through this checklist, CORPIQ informs you of the changes specifically affecting sections F and G of the lease.

Section F: Restrictions on the right to set rent and to modify leases

Conditions to be met for Section F restriction to apply from February 21, 2024 :

1. Tick one of the boxes giving access to the restriction:
   
   
• A building newly constructed within the last FIVE years.
  
                              OR
  
  
• Change of function within the last FIVE years.
  i.e. the building changes from commercial to residential use.
  
  
2. Enter the date on which the building was made available for occupancy.
   
   
• The building must be ready for occupancy by February 21, 2024.
  
  
3. Declare the maximum amount that the landlord may charge within 5 years of the date on which the building is ready for its intended use.
   
   
• Unfortunately, there are no legal guidelines to help you set the maximum rent. It's up to you to decide.
  
  
• Please note that the current lease form from the Tribunal administratif du logement (TAL) is not yet up to date. Therefore, this declaration is not included in the lease.
  
  
• Before signing your lease, don't forget to obtain the "Notice to a new lessee (rent ceiling)", available on the TAL website.
  
  
• Please note that as of today, this form is not available in English.
  
  
4. Lease to be signed between the parties on or after February 21, 2024.

 

IMPORTANT TO REMEMBER: If you entered into a lease prior to February 21, 2024 OR the building is ready for occupancy prior to February 21, 2024, you are not required to declare the maximum rent in five years for the restriction in section F to apply. 

As of February 21, 2024, if you meet all the above conditions, during renewals within the 5-year period from the date on which the building was ready for occupancy, you will not be subject to the rent-setting criteria under the Regulation respecting rent-setting criteria. Please note that if the tenant refuses your rent increase and/or any other modifications to the lease, they will have to leave at the end of the term.

Corpiq provides a specific renewal notice for this situation on our site, entitled "Notice of lease renewal for an immovable erected five years ago or less".

 

Section G: Notice to new tenant

Article 1896 of the Civil Code of Quebec imposes an obligation on the landlord, when entering into a lease, to declare to the tenant the lowest rent paid by your tenants during the last 12 months preceding the start of your lease, or the rent set by the Tribunal administratif du logement during this period. If no rent has been paid in the 12 months prior to the start of the lease, you must indicate the last rent paid and its date. This situation applies when your property has been vacant or occupied by the owner for more than 12 months.

As mentioned above, since the lease form is not yet up to date, you must obtain the "Notice to new tenant (last rent paid)" from the Tribunal administratif du logement website.

Note that only a new tenant or sub-tenant can take advantage of a rent-fixing appeal under this section of the lease.

In fact, there are three possible scenarios arising from this section which have varying consequences:

1. If you truthfully declare the lowest rent paid, the tenant has 10 days from the signing of the lease to file an application with the Tribunal administratif du logement to have the rent set in accordance with the rent-setting criteria.
   
   
2. If you fail to declare the lowest rent paid, the tenant has a longer period in which to apply to the Tribunal administratif du logement for the rent to be fixed, i.e. 2 months from the start of the lease.
   
   
3. If you misrepresent the lowest rent paid, the tenant has 2 months from the moment of knowledge of the misrepresentation.

It is essential to point out that for all leases entered into on or after February 21, 2024, if the notice contains a false statement or you knowingly fail to declare the amount, in addition to benefiting from longer deadlines for initiating the fixing appeal, the tenant has the right to apply to the Tribunal administratif du logement for punitive damages.