Your commercial lease expires next month and you're\nwondering if it will be automatically renewed? Are you entitled to remain on\nthe premises? Under what conditions can the lessor terminate your lease and\nforce you to vacate the commercial space? Is it legal to have the lease\nterminated immediately if you are in default of one month's rent? What can be\nincluded in a commercial lease agreement? <\/p>\n\n\n\n
The rights and obligations of the lessee and lessor\nare established in articles 1851 to 1891 of the Civil Code of Qu\u00e9bec\n(hereinafter: C.C.Q.). It should be noted that most of these articles are not\nmatters of public policy in the context of a commercial lease. It is therefore\npossible for the lessee and the lessor to derogate from these articles and\nadjust their contractual relationship as they wish. In other words, with\nrespect to commercial leases, the parties may agree on rules that differ from\nthose of the C.C.Q. and the contract agreed upon becomes the law of the\nparties. It is only when the lease fails to provide for your rights and\nobligations that the provisions of the C.C.Q. will apply. <\/p>\n\n\n\n
It is therefore up to you and the lessor to choose\nwhich articles of the C.C.Q. you want to apply and which ones you want to set\naside. You must take the time to properly negotiate the clauses of your\ncommercial lease to ensure that they suit your needs and are in your best\ninterests. <\/p>\n\n\n\n
This article will review some of the rights and\nobligations of the lessee and lessor as provided for in the C.C.Q.<\/p>\n\n\n\n
One of the principal obligations of the lessee, as set\nout in article 1855 of the C.C.Q., is to pay rent according to the terms agreed\nupon in the contract, throughout the term of the lease. In commercial leases,\nit is common to include a clause indicating that the lessee must pay, in\naddition to the fixed monthly rent (base rent), all or a percentage of the\nexpenses of the leased building, such as insurance or property and school\ntaxes. It is therefore very important to read your commercial lease carefully\nto verify what you will be required to pay as a lessee. <\/p>\n\n\n\n
The lessee must also use the leased property with\nprudence and diligence. For example, this requirement includes the obligation\nto repair any loss to the leased premises, as provided for in article 1862 of\nthe C.C.Q. Article 1862, paragraph 1 of the C.C.Q. is drafted in favour of the\nlessor, because, as soon as it is proven that the leased premises have\nsustained loss, it is presumed to be due to the fault of the lessee. To avoid\nbeing held liable for the loss to the premises, the lessee will have to show\nthat the loss sustained \"is not due to his fault or that of persons he\nallows to use or to have access to the property.\"[1]<\/a> Article 1862 paragraph 2\nof the C.C.Q. provides an exception to the lessee's liability in the event of\nloss of the leased premises due to fire. In fact, the lessee will only be held\nliable for loss suffered if it is proven that the fire \"was due to his fault\nor that of persons he allowed to have access to the immovable.\"[2]<\/a> It should be noted that\narticle 1862 of the C.C.Q. is a matter of public policy, so that it cannot be\nderogated from in a commercial lease contract to provide otherwise.[3]<\/a><\/p>\n\n\n\n Article 1890 paragraph 1 of the C.C.Q. also requires\nthe lessee to return the leased premises at the end of the lease in the\ncondition in which it was received. However, the lessee is not liable for any\nchanges resulting from aging or fair wear and tear of the property or superior\nforce<\/a>[MU1]<\/a> . Article 1891,\nparagraph 1 of the C.C.Q. provides that the lessee is bound, at the end of the\nlease, to remove any constructions, works or plantations he has made. It should\nbe emphasized that the parties to a commercial lease may decide that these\nobligations will not apply to their contractual relationship, since these\narticles are not matters of public policy.<\/p>\n\n\n\n The lessor's primary obligation to the lessee is to provide the lessee with peaceable enjoyment of the leased business premises throughout the term of the lease. This obligation, set out in article 1854, paragraph 1 of the C.C.Q., has been deemed essential by jurisprudence.[4]<\/a> The only way for a lessor to avoid it is to prove that they were unable to ensure the peaceful enjoyment of the premises because of superior force<\/a>[MU2]<\/a> or the fault of a third party for which they are not responsible.[5]<\/a> For example, it was decided that the ice storm that hit Quebec in January 1998 was a case of superior force<\/a>[MU3]<\/a>. As a result, lessors were released from their obligation to provide peaceful enjoyment of the premises and were not held liable for damages caused by the storm. Under the circumstances, those lessees affected were still entitled to a rent reduction.[6]<\/a><\/p>\n\n\n\n When it comes to commercial leases, the obligation to\nprovide peaceful enjoyment of the premises is not a matter of public policy.\nHowever, the lessor's freedom to restrict this obligation is regulated. The\ncourts have ruled that \"a clause that restricts the lessor's obligations\ncannot have the effect of depriving the lessee of all enjoyment, given the\nessential nature of the related obligation.\"[7]<\/a> Thus, it is important to\npay particular attention to exclusion of liability clauses drafted in favour of\nthe lessor, to ensure that they are legal.<\/p>\n\n\n\n In addition to being bound to guarantee the peaceful\nenjoyment of the premises, the lessor is bound to deliver the leased property\nin a good state of repair in all respects, in accordance with article 1854\nparagraph 1 of the C.C.Q. However, since this provision is not a matter of\npublic policy in the context of a commercial lease, a clause stating that the\nlessee accepts the premises \"as is\" is legal, unless this has the\neffect of depriving the lessee of the enjoyment of the premises.[8]<\/a><\/p>\n\n\n\n Article 1854 paragraph 2 of the C.C.Q. provides that\nthe lessor is \"bound to warrant the lessee that the property may be used\nfor the purpose for which it was leased and to maintain the property for that\npurpose throughout the term of the lease.\"[9]<\/a> In the case where the\ncommercial premises are leased for the operation of a restaurant, for example,\nthe lessor may be liable if the lessee cannot obtain the necessary operating\npermits because the premises do not comply with municipal standards.[10]<\/a> However, in the case of\ncommercial leases, this provision is not a matter of public policy and the\nlessor has the right to exclude its liability in this regard. The parties may even\nagree that it is the lessee's responsibility to ensure that the premises meet\nmunicipal standards in order to operate a restaurant. <\/p>\n\n\n\n In the case of a commercial lease, unlike the lessee\nof a residential lease, the commercial lessee does not have an automatic right\nto remain in the premises at the end of the lease. This means that without a\nrenewal clause included in your lease, your contract will end at the expiration\nof the agreed term. It may be a good idea to negotiate renewal options with\nyour lessor to ensure that you keep your premises and are not forced to move\nyour business.<\/p>\n\n\n\n For commercial leases, the parties may stipulate in\ntheir contract the situations in which their lease will be terminated by\nincluding a lease termination clause.<\/p>\n\n\n\n Often, this type of clause stipulates that if the\nlessee defaults, the lessor can terminate the lease and force the lessee to\nleave the premises without having to go to court to obtain permission. For\nexample, it may be stipulated that the lessor may terminate the lease and force\nthe lessee to vacate the premises if the lessee fails to pay one month's rent.\nThe Quebec courts have recognized that this type of \"as of right\"\ntermination clause is legally valid. However, a lessor who avails itself of\nsuch a clause must act reasonably. The courts have recognized that a lessor who\nacts in bad faith or in an abusive manner towards the lessee may be liable for\ndamages. <\/p>\n\n\n\n The lessor and the lessee may stipulate grounds for\nterminating a lease in their favour. It is important for the lessee to\nnegotiate this type of clause with their lessor and to anticipate the\nsituations in which they too can terminate the lease. For example, it would be\nadvantageous for the lessee to be able to terminate the lease if the lessor\nfails to perform any work identified as being its responsibility in the\ncommercial lease.<\/p>\n\n\n\n It should be noted that a lease termination clause must be clearly and\nunequivocally drafted to be valid. It is therefore recommended that an attorney\nbe consulted when drafting such a clause.<\/p>\n\n\n\n Be vigilant and pay particular attention to the\nclauses stipulated in the lease before signing it. In the case of a commercial\nlease, the lessee is not as well protected by the law as in the case of a\nresidential lease, which has several public policy provisions that benefit the\nlessee. <\/p>\n\n\n\n Drafting a commercial lease is not a simple task that should be taken lightly. It is therefore prudent to consult a lawyer<\/a>, who will be able to guide you through all the essential clauses of your commercial lease. [1]<\/a> Art. 1862 para.\n1 C.C.Q.<\/em><\/p>\n\n\n\n [2]<\/a>Art. 1862 para. 2 C.C.Q.<\/em><\/p>\n\n\n\n [3]<\/a>Louise LANGEVIN and Nathalie\nV\u00c9ZINA, Le louage<\/em>, in Collection de\ndroit 2019-20, \u00c9cole du Barreau du Qu\u00e9bec, vol. 6, Obligations et contrats<\/em>,\nCowansville, \u00c9ditions Yvon Blais, 2019, p. 282.<\/ins><\/p>\n\n\n\n [4]<\/a> Placements de Lavoie Inc.<\/em> c. 9154-1490 Qu\u00e9bec Inc.<\/em>,\n2012 QCCQ 669 (CanLII)<\/p>\n\n\n\n [5]<\/a>Ibid.<\/em><\/p>\n\n\n\n [6]<\/a> L. LANGEVIN and\nN. V\u00c9ZINA, prec., note 3, p.275.<\/ins><\/p>\n\n\n\n [7]<\/a>Soci\u00e9t\u00e9 de gestion Complan\n(1980) Inc.<\/em>\nc.Bell Distribution Inc.<\/em>, 2011 QCCA 320<\/p>\n\n\n\n [8]<\/a>L. LANGEVIN and\nN. V\u00c9ZINA, prec., note 3, p.274.<\/ins><\/p>\n\n\n\nVarious Rights and Obligations of the Lessor as Provided for in the C.C.Q.<\/h2>\n\n\n\n
Standard Clauses Found in Commercial Leases<\/h2>\n\n\n\n
Lease Termination Clause<\/h2>\n\n\n\n
Steps to Take Before Signing a Commercial Lease<\/h2>\n\n\n\n
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