On February 21, the National Assembly adopted Bill 31: An Act to amend various legislative provisions as regards housing (the “Act“). According to the legislator, these amendments, aimed at increasing the supply of housing in Quebec, provide stricter control over rent increases in new construction, introduce initiatives to accelerate the completion of housing projects, and strengthen tenants’ rights with regard to eviction and lease assignment.

These measures include more generous compensation for evicted tenants, the possibility of claiming punitive damages in the event of landlord misrepresentation, and more flexible lease assignment rules. In addition, these changes provide for an adaptation of the intervention measures of the Tribunal administratif du logement (the ” TAL“), designed to make the process more efficient and equitable.

It’s crucial to take these developments into account to understand their implications for your rights and obligations as a tenant or owner.

Stricter controls on rent increases for new buildings

The amendments adopted by the Act deal first with the formalities surrounding rent increases in newly built buildings or buildings whose use for rental purposes results from a recent change of use..

In effect, the landlord of a new construction who wishes to increase the rent in the five years following the date on which the dwelling is ready to be rented, will have to include in clause F of his tenant’s standardized lease, the maximum rent he could charge for this period.. Ainsi, le locateur devra indiquer au bail le loyer maximal qu’il pourra exiger au cours des cinq premières années, sans toutefois avoir l’obligation de mentionner l’augmentation précise que le locataire subira chaque année. Consequently, landlords and tenants will have to agree on the maximum rent applicable to their new lease, since the previously agreed rent cannot be invoked by the tenant against the landlord in this new lease situation.

When sending the renewal notice, the landlord must specify the increase for the coming year, within the maximum rent. It will therefore be very important to pay particular attention to this new mandatory mention when a landlord drafts leases or when notices of rent increases are sent out.

Increased municipal initiative to accelerate housing projects

The Act now allows municipalities to authorize social, affordable or student housing projects that deviate from urban planning rules for a set period, renewable under certain conditions.. Cette mesure vise à accélérer l’obtention des permis de construction, simplifier les exigences en matière de planification, et fournir un soutien financier pour accélérer la construction. Elle donne aux municipalités le pouvoir d’autoriser des projets de logements qui ne respectent pas les règlements d’urbanisme en vigueur, notamment en ce qui concerne la taille, la densité ou d’autres critères de conception. Elle vise à permettre la construction de logements sociaux, abordables ou destinés aux étudiants dans des zones où les règles d’urbanisme pourraient autrement restreindre ou interdire de tels projets.

The government plans to grant derogations for a period of three (3) years, renewable for two (2) years by ministerial order, in order to give developers the time they need to complete their projects.. De plus, les municipalités comptant 10 000 habitants ou plus, avec un taux de logements vacants inférieur à 3 %, sont habilitées à autoriser d’autres projets résidentiels de trois logements ou plus, également en dérogation aux règles d’urbanisme, pour une période initiale de trois ans, renouvelable deux ans par décision ministérielle.

In addition, secondary suites, such as apartments in garages or additional units in existing homes, also benefit from a new exception. For a period of five years, these accessory dwellings will be automatically permitted, meaning that owners will not need to obtain special authorizations or navigate complex approval processes. This legislative change is designed to encourage the creation of additional housing without the need for major new construction, thereby helping to increase the supply of available housing.

However, given the very recent adoption of the Act, the details of these new exemptions and their implementation by municipal authorities have not yet been specified. We will update this article as developments become available.

Measures to control and penalize eviction

The main aim of these legislative changes is to improve conditions for tenants, and this involves a number of measures. Indeed, a landlord wishing to evict or repossess a dwelling will have to pay the tenant an indemnity covering reasonable moving expenses, as well as a sum ranging from a minimum of three months’ rent to a maximum of 24 months’ rent. . Cette modification vise l’article 1685 alinéa 1 du Quebec Civil Code and considerably increases the indemnities payable by the landlord. Indeed, the landlord could be obliged to pay an additional indemnity of one month’s rent per year of occupancy, whereas the previous legislation only stipulated an indemnity of three months’ rent, which of course represents a much larger sum.

In addition, these new legislative measures now authorize the tenant to recover damages for any repossession or eviction unless the landlord demonstrates good faith justifying the action.. Il s’agit là d’une dérogation importante à la présomption de bonne foi normalement applicable en droit civil . Effectivement, cette modification vise l’article 1968 du Civil Code of Québec and adds an additional burden to the landlord, who will now have to prove his good faith when taking over or evicting a tenant, thus derogating from the principle of presumption of good faith well known in civil law.

Particular attention paid to the notice of the lowest rent paid

The changes made to section 1988 of the Civil Code of QuébecIn the case of a lease, the legislator has further extended tenants’ rights by allowing them to claim punitive damages when the landlord intentionally fails to provide the new tenant with notice of the lowest rent previously paid, or the last rent in the event of vacancy for more than 12 months (clause G of the lease), or makes a false statement in this regard. We assume that the onus will be on the tenant to demonstrate the landlord’s “intentional” omission of this practice. However, we will remain attentive to any developments or interpretations on this subject.

New measures to make transfer rights more flexible

New measures have also been included to make lease assignments more flexible, and to counter subletting and assignment for profit. The tenant still has the right to ask his landlord for an assignment of lease, but the landlord now has a broader right to refuse to agree to it for any reason other than a serious one. . Effectivement, en cas de refus de la part du propriétaire de consentir à la cession de bail, le locataire serait libéré de ses obligations contractuelles et le bail pourra être résilié au choix du locateur. Bien que le locateur bénéficiait antérieurement d’un droit de refus à la cession du bail en cas de motif sérieux, cette notion se voit tout de même élargie en n’obligeant plus celui-ci à motiver de la même manière son refus.

The requirements for the notice of assignment provided by the tenant have also been clarified. From now on, the tenant must indicate the planned assignment date. If the landlord refuses, this will allow the lease to be terminated on the assignment date specified in the tenant’s notice.

More flexible intervention by the Housing Administrative Tribunal

The changes introduced by the Act are designed to make the rules governing representation before the Tribunal administratif du logement (TAL) more flexible.. Elles incluent spécifiquement la possibilité pour un membre du TAL de soulever de manière automatique la prescription d’une demande qui lui est soumise. De plus, le TAL serait autorisé à rendre des ordonnances d’exécution en nature même si les coûts excèdent son plafond de compétence monétaire, soit une somme ne pouvant excéder 100 000 $ .

However, this monetary jurisdiction limit does not apply in certain cases expressly provided for in the Act. Indeed, the TAL will now be able to hear cases worth $100,000 or more in the following situations: remedies for non-performance causing damages recourse for landlord’s failure to carry out work required by the leaseremedies to determine the healthiness of the dwelling and remedies to force the landlord to make the dwelling fit for habitation.

Conclusion

In short, the adoption of the Act will result in significant revisions to leasing habits, obligations and rights for all parties involved. Our team remains available to discuss these changes with you, and to analyze any impact they may have on your internal practices.

By Selma Adam and Audrey Robitaille