Le mardi 08 janvier 2008

Leasing and co-ownership : specific rules.

By: Me Serge Abud,

lawyer, PAPINEAU AVOCATS inc.

The rules in use for leasing apply to a co-owned unit, just like any other dwelling. On this subject, a first reference has to be made to sections 1851 to 1978 of the Quebec civil Code (Q.c.C.) 1 and another, accessorily, to the Act respecting the Régie du logement. The jurisdiction of this body is exclusive during the first proceeding pending all that touches a dwelling lease.

In this article, we will see how the lessor, the lessee and the syndicate of co-ownership are affected by the rules applying to co-ownership.

Rights and obligations of the lessee.

Section 1057 C.c.Q. stipulates that the by-laws of the immovable may be set up against the lessee of a private portion upon his being given a copy of the by-laws by the co-owner or, if not by him, by the syndicate. 2 Therefore, the lessee is bound by the by-laws from the moment he receives a copy. Neither the lessor nor the syndicate could blame the lessee for not complying to by-laws he has not been made aware of. However, Me Pierre Therrien established in Briskin c. Fernandez 3, that by-laws may be set up against a lessee even if the lessor has not given him a copy of the by-laws before entering into the lease 4, but the lessor still must do it in a reasonnable time.

The importance of communicating the by-laws to the lessee may become essential when it comes to determine the civil liability of the lessor. For example, in Tremblay c. Tremblay 5, judge Michel St-Hilaire of the Quebec Court ordered the lessor to refund the many expenses of the lessee whom he lead to think that she could operate a hairdressing salon in his condo. The lessor had never mentioned to her the by-laws that clearly forbid it.

In the case of disturbance of enjoyment, only the lessor could take actions against a third party. Let's say that a very noisy co-owner is living in an appartment next to a leased unit. The lessee could only seek a rent reduction from the lessor 6. Only the lessor could take an action against the other co-owner or ask the syndicate to enforce the by-laws, presumably designed for peacefulness.

Obligations of the lessor

The co-owner who gives a lease on his private portion shall notify the syndicate and give the name of the lessee (Section 1065 C.c.Q.). Therefore, all the lessees names must be in the register kept by the syndicate, as required by section 1070 C.c.Q.

This requirement is minimal and it is very important to look for any other relevant section of the co-ownership declaration, that could state additional requirements, and read them very carefully. For example, leases with a term less than twelve months could well be forbidden 7 in order to preserve a certain stability among the residents and to avoid a constant and perturbing trafic of strangers in the building.

The syndicate and the lessee

Legally, the relations between the co-owner who gives a lease and the syndicate are almost unchanged. The co-owner still must fulfill his obligations, like paying for the common expenses and the contingency fund. On the other hand, the lessee has no contractual ground to make demands before the syndicate or take actions against it. 8

Nonetheless, when a private portion is leased, section 1066 C.c.Q. requires that the syndicate give the lessee the notices prescribed in articles 1922 and 1931 regarding urgent improvements or repairs and the prior twenty-four notice before carrying work in the dwelling or having it visited.

Moreover, section 1079 C.c.Q. allows that the syndicate demand the resiliation of the lease of a private portion, if the lessee «causes serious prejudice to a co-owner or to another occupant of the immovable». On the other hand, section 1863 C.c.Q. allows the lessee to demand the resiliation of the lease.

The new buyer

Finally, it should be known that acquiring an already leased unit does not terminate one's obligations regarding the ongoing lease and that the mere fact that one has become the new lessor does not justify a demand of resiliation, unless one intends to move in or lets a first degree family member do so. 9

After the conversion of an immovable to divided co-ownership

In the case of a converted dwelling, if the lessee was in place before the notice of intent 10 was given, the right to retake possession of the dwelling cannot be exercised against the lessee after the conversion, even by ulterior buyers. 11

1 The Civil Code of Quebec and other Quebec legislative texts may easily be consulted on line at www.publicationsduquebec.gouv.qc.ca

2 According to section 55 of the Act Respecting the Implementation of the Reform of the Civil Code, this also applies to leases signed before january 1st 1994, when the Quebec civil Code became effective.

3 [1996] J.L. 139

4 In the case of an «ordinary» dwelling, see section 1894 C.c.Q.

5 J.E. 99-411

6 See Picard c. Jacques, REJB 2002-35508

7 See Kilzi c. Syndicat des copropriétaires du 10 400 boul. l’Acadie, [1998] R.J.Q. 2393, REJB 1998-07598

8 See Syndicat des copropriétaires du Bief des Seigneurs, tour «D» c. Klein, J.E. 2003-2174, REJB 2003-49451

9 See section 1957 C.c.Q.

10 See section 52 of the Act Respecting the Régie du Logement

11 See Laryea c. Boudjema, J.E. 2005-256, REJB 2005- 82633