Help and clarification on the laws surrounding commercial leases

Are you wondering how commercial lease law is regulated in Canada?

The legal relationship between the landlord and tenant is not only subject to the terms of the lease itself but also to certain provisions of the Civil Code of Quebec. Among these provisions, some specifically apply to commercial leases (Articles 1851 to 1891).

1. Guarantee regarding the intended use of the property

As stated in the second paragraph of Article 1854 of the Code, the landlord is required to guarantee to the tenant that the property can be used for the purpose for which it is rented and to maintain it accordingly throughout the lease term.

2. Peaceful enjoyment

The landlord must ensure the tenant’s peaceful enjoyment of the property for the entire lease term (first paragraph of Article 1854 of the Code). However, the landlord is not required to repair damage resulting from interference caused by a third party.

3. Non-performance of an obligation

Under Article 1863 of the Code, the non-performance of an obligation by one party gives the other the right to request:

• Compensation;
• Compensation and specific performance;
• Termination of the lease, if non-performance causes serious harm to the tenant or other occupants.

Additionally, non-performance by the landlord gives the tenant the right to request a rent reduction from the court.

4. Assignment and subleasing

Commercial lease law also allows the tenant to sublease all or part of the leased property or assign the lease. The tenant must notify the landlord of their intention, provide the name and address of the person to whom they intend to sublease or assign the lease, and obtain the landlord’s consent.

Unless otherwise stated in the lease, assigning the lease releases the former tenant from obligations under the original lease (Article 1873 of the Code), which is not the case for subleasing.

5. Lease termination

A tenant facing lease termination for non-payment of rent can avoid termination by paying, before judgment, the outstanding rent along with any applicable fees and interest (Article 1883 of the Code).

Although Article 1883 of the Code is considered public order (the right it grants cannot be waived by the tenant), many commercial leases provide for the tenant to waive the application of this article.

6. Return of the property

At the end of the lease, the tenant must return the property in the condition in which it was received, except for changes due to wear and tear, normal aging, or force majeure (Article 1890 of the Code).

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