Lease 101

What you need to know about your lease

Many protections exist for renters, but many myths and misperceptions persist. Photo: Marc Bruxelle via Shutterstock

With moving day only three months away, many renters in the neighbourhood will either be renewing their existing lease or moving to a new apartment. While leases can start and finish throughout the year, most run from Jul. 1 to Jun. 30.

Many myths and misinterpretations persist with regards to leases and tenant rights, which can sometimes open the door to abuses and unfair treatment of tenants.

This article hopes to address some of the most important questions regarding leases and what tools and protections exist to help protect the people who rent their homes. 

What is a lease?

According to Éducaloi, a lease is a written or oral contract between a landlord and a tenant in which the tenant agrees to pay rent and the landlord allows the tenant to live in the rental unit and enjoy it in peace.

“It is signed between a tenant and a landlord. In it, the landlord agrees to provide the tenant with a rental unit in good condition in exchange for rent,” explained Éducaloi. 

The document lists the conditions set to be followed by both the tenant and the owner, including specifications on maintenance to be undertaken and the conditions to be respected by the tenant, such as a ban on smoking inside or the interdiction of keeping animals in the dwelling. 

The Tribunal Administratif du Logement (TAL) stipulates several protections for renters when it comes to leasing conditions. For example, modifying rent price during the period of the lease or increasing rent if the number of occupants increases is not permitted and can be contested.

“The law does not require a landlord to respect a certain rent increase threshold when renewing a lease,”

Lease renewal

A lease is generally signed for 12 months, where conditions between the tenant and owner can be renegotiated once it expires. This often includes a rental increase agreement that is negotiated between owner and tenant. 

Although owners are allowed to propose amendments to a lease once it expires, tenants are by no means obligated to accept the new conditions and cannot be forced to leave if they refuse them. 

If the landlord does not send a notice of renewal or amendment to the lease, it will renew automatically under the same conditions as the previous year. 

Approximately 72% of people in Villeray–Saint-Michel–Parc-Extension are renters according to Statistics Canada numbers from 2016. Photo: PROFIL SOCIODÉMOGRAPHIQUE: Recensement 2016 by Montréal en statistiques 

Maximum rent increase?

But by how much can an owner increase rent price? In Québec, no law stipulates a maximum rate of increase. “The law does not require a landlord to respect a certain rent increase threshold when renewing a lease,” said Denis Miron, spokesperson for the TAL. 

A tenant can nonetheless refuse a rent that they feel is exorbitant up to a month after the notice is received. The owner would then be able to ask the TAL to intervene and set an appropriate rent, often pegged at around 2% per year. 

The TAL recently published its rent increase rates for 2022, set at 1.28% for an unheated dwelling and 1.34% for a dwelling heated with electricity. A tool is available on the TALs website to calculate appropriate rent increases.

“This allows you to establish the rent increase, taking into account the variation in municipal and school taxes, insurance, major improvements, as well as all the operating costs of the building,” continued Miron.

Long-term leases

While most leases last 12 months, no law stipulates how long a lease should last. A lease can be for a fixed term or for an indefinite period, where the end of the contract is not determined in advance.

Although uncommon, a lease can in theory last more than 12 months. “If the lease is for a fixed term of more than 12 months, the parties can agree to include a rent readjustment clause during the lease,” said Miron on how rent increases would be approached.

“When the lease provides for the readjustment of the rent, the parties may apply to the TAL to contest the excessive or insufficient nature of the proposed or agreed readjustment and have the rent fixed,” he added. 

Evictions and repossessions

While tenants have a fundamental right to remain in their dwellings, some exceptions exist. Eviction is permitted under certain circumstances where an owner wants to perform major renovations or change the building’s use. 

Owners are also permitted to perform repossessions where they wish to provide the dwelling to a family member. 

But protections exist for tenants in these circumstances. If the tenant is 70-years or over,

has lived in the apartment for 10 years or more or has an income that would qualify them for low-rental housing, eviction is not allowed. 

It is also important that owners give appropriate notice of at least 6 months before the end of a 12-month lease, compensate tenants for 3 months’ rent and pay all expenses associated with moving. If tenants think the owner acted in bad faith, they can sue the landlord for damages through the TAL.

More information and resources are available through multiple organizations like ÉducaloiComité d’action de Parc-ExtensionTribunal Administratif du Logement (TAL) and RCLALQ.

If the landlord does not send a notice of renewal or amendment to the lease, it will renew automatically under the same conditions as the previous year. Photo: Catherine Zibo via Shutterstock