Your company is a tenant in premises governed by a commercial lease. You love the strategic location, the rent is reasonable, your neighbours are friendly and all this is located just minutes away from an excellent Vietnamese restaurant. Even better, there are still six years left to go on the lease and you have a renewal option for another five years under the same terms. In short, you are enjoying the benefits of a skilful negotiation.

You probably already suspect that the next paragraph will herald a fly in the ointment…

The owner decides to sell the building and the buyer thinks you were a little too successful in your negotiations. So with total disregard for your taste buds and your love of spring rolls, the new landlord serves you a notice of cancellation of your lease effective in 12 months, prematurely killing your sweetheart deal!

• Question: Can the new landlord get away with this?
• Answer: Yes.
• Question: Is this unfair?
• Answer: Not according to the new landlord…
• Question: Could you have avoided this cancellation of your lease?
• Answer: Yes (read what follows).

Under article 1887 of the Civil Code of Québec:

 “The acquirer or the person who benefits from the extinction of title may resiliate the lease, if it is a lease with an indeterminate term, in accordance with the ordinary rules pertaining to resiliation contained in this section.

In the case of the lease of an immovable with a fixed term and if more than 12 months remain from the date of alienation or extinction of title, he may resiliate it upon expiry of the 12 months by giving the lessee written notice of 6 months.

He may not resiliate the lease if it was registered at the registry office before the act of alienation or the act by which the title is extinguished was so registered.’’

Thus, by publishing your commercial lease (as soon as possible and before the building is sold) with the Quebec registry office, you can protect yourself in this regard and avoid a premature cancellation of your commercial lease by a new landlord. This will spare you all the bother and costs associated with moving your business.

Just follow the instructions set out in article 2999.1 of the Civil Code of Québec. It is also important to note that any amendment to your lease must also be published for it to be binding on a new landlord.

In closing, remember that your commercial lease is an important business asset and therefore requires adequate protection. In this case, protection is simple and inexpensive, so you have every reason to publish your lease without delay.

This article was also published in Liason, the Canadian Assotiation of Paralegals magazine.

If you have any questions or ideas for my next article, please feel free to contact me at 514-856-5601 (320) / malek@maleklaflamme.ca

Do I have to publish my commercial lease?

Commercial lease: Protect your commercial lease by publishing it asap at the Quebec registry office.

Sam Tardif Malek