After many parliamentary debate sessions since October 2023, Bill 31, An Act to amend various legislative provisions with respect to housing (hereinafter "Bill 31"), was passed on February 21, 2024.
This new omnibus legislation makes several modifications to many laws, more specifically to the following:
- Civil Code of Québec;
- Cities and Towns Act (chapter C-19);
- Municipal Code of Québec (chapter C-27.1);
- Act respecting land use planning and development (chapter A-19.1);
- Act respecting the Communauté métropolitaine de Montréal (chapter C-37.01);
- Companies Act (chapter C-38);
- Cooperatives Act (chapter C-67.2);
- Act respecting municipal taxation (chapter F-2.1);
- Act respecting the Société d'habitation du Québec (chapter S-8);
- Act respecting public transit authorities (chapter S-30.01);
- Act respecting the Administrative Housing Tribunal (chapter T-15.01);
- Act mainly to regulate building inspections and divided co-ownership, to replace the name and improve the rules of operation of the Régie du logement and to amend the Act respecting the Société d'habitation du Québec and various legislative provisions concerning municipal affairs (2019, chapter 28).
While this is not an exhaustive analysis of all the legislative changes introduced by Bill 31, it does summarize some of the important ones.
Rent increase control
With the legislative changes made to article 1955 of the Civil Code of Quebec, the lessor of an immovable, including a new or newly renovated immovable, must, in advance, establish in the lease the rent increases to which he will be entitled, failing which the lessee will be able to contest these increases. Therefore, when entering into a residential lease, the lessor and the lessee of a dwelling situated in an immovable to which this article applies should negotiate the maximum amount of rent that the lessor may request in the next five years, under Clause F of the residential lease.
Additionally, the new legislative modification to article 1893 of the Civil Code of Quebec provides the possibility for the lessee to claim for punitive damages if the lessor makes a false statement or fails to fill out Clause G of the residential lease regarding the declaration of lowest paid rent of the dwelling over the last 12 months.
Restrictions on eviction
The amendment to article 1965 of the Civil Code of Quebec establishes a minimum threshold for the amount of compensation that must be paid by a lessor to a lessee that he or she wants to evict, i.e., "reasonable moving expenses as well as an indemnity equal to one month's rent for each year of uninterrupted lease of the dwelling by the lessee, which indemnity may not however exceed an amount representing 24 months of rent or be less than an amount representing 3 months' rent". A lessor is not obligated to pay damages claimed by a lessee resulting from an eviction if he or she can demonstrate that the eviction was in good faith. However, if it is demonstrated that the eviction was in bad faith, the lessee may recover punitive damages (section 1968 of the Civil Code of Quebec).
Assignment of lease
During the debate sessions leading to the adoption of Bill 31, much was said about the addition of new articles under a new Section 8.1 of the Civil Code of Québec entitled "Assignment of lease" (articles 1978.1 et seq). The new provisions include, inter alia, the right for a lessor to reject without serious reasons a request by a lessee for an assignment of lease. In such a case, the lease is terminated on the date of assignment indicated in the notice sent by the lessee. This new section also provides that a lessee will no longer be able to transfer or sublet a lease for a profit.
Modifications to the Act respecting the Administrative Housing Tribunal
Article 28 of the Act respecting the Administrative Housing Tribunal establishes a new shared jurisdiction where the Tribunal may hear in first instance any application respecting an order or authorization contemplated in the following articles of the Civil Code of Quebec: 1863 (proceedings for damages or specific performance of the obligation in the event one or the other of the parties to the lease fails to comply with its obligations), 1867 (obtaining the authorization of the court to carry out the repairs to which the lessor is bound), 1917 (the request to have a dwelling declared unfit for habitation) and 1918 (obtaining authorization by the court to carry out work to prevent the dwelling from becoming unfit for habitation), even when the value involved exceeds the amount of the upper monetary limit for the concurrent jurisdiction of the Court of Québec of $100 000 (article 35 of the Code of civil procedure).
Moreover, the new language of articles 72 and 74 of the Act respecting the Administrative Housing Tribunal simplifies the requirements with regards to representation of the parties before the Administrative Housing Tribunal, both for natural persons and legal entities, by allowing a party to be represented by a mandatary of his or her choice.
Affordable and students housing
The amendments to the Act respecting municipal taxation include the right for the Commission municipal du Québec to grant property tax exemption to a user who carries out an eligible activity, among others, "the rental of dwelling to persons registered" in an educational establishment as defined in the Act, for example universities (article 243.8 of Act respecting municipal taxation). At the same time, the exemption from real estate taxes by operation of law in favor of "a university establishment within the meaning of the University Investments Act" from which benefited certain non-profit organizations, was replaced by a "university-level establishment referred to in paragraphs 1 to 11 of article 1 of the Act respecting educational institutions at the university level" which has the effect, among other things, of excluding from this exemption "any legal person whose object is to construct and administer university student residences".
These provisions must be read in conjunction with the addition of article 36.2 in Bill 31 under which is exempted from any property tax an immovable registered "in the name of a non-profit legal person whose object is to build and administer university-level student residences" for a period of 5 years from the date of sanction of this law.
Accelerating housing projects (article 37.2 of Bill 31)
Bill 31 adds certain tools for municipalities in order to promote greater availability of affordable housing on their territory. These provisions will enable them to derogate from their own bylaws, within the timeframes and according to the criteria set out in the Act, in order to allow the housing project in question to be carried out.
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Bill 31 was presented as a legislative solution intended to be the government's response to an unprecedented housing crisis that is being felt throughout Quebec. These changes will certainly have a significant impact on stakeholders in the housing industry, who will now have to adapt and learn to navigate through the new reality created by the adoption of Bill 31.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.