November 2011

Publishing a commercial lease

By Richard Gendron

In the event that the commercial building in which you rent business premises is sold, is your lease protected? Will the new owner have to fulfill the terms and conditions set out in the lease until it expires?

These are important questions that you, as a business owner, must consider to ensure that your organization continues to thrive.
The Civil Code of Québec (sect. 1887 C.C.Q.) stipulates that a new purchaser may cancel the lease according to the termination rules set out in the Civil Code.
In the case of a lease of an indeterminate term, the term of the notice is of the same duration as the term fixed for rent payment but may not be of more than three months.
In the case of a fixed term lease that exceeds 12 months, the purchaser may cancel the lease once the 12 months have passed with a written notice to the lessee six months before term.
A purchaser may therefore cancel an indeterminate or a fixed term lease before it expires.
Once the lease has expired, the lessee must vacate the premises or renegotiate the terms of a new lease. The lessee should also budget for additional costs such as moving expenses or higher rent.
To avoid this unfortunate situation, we strongly recommend that you sign and register your lease with the registry office as soon as possible, since a registered lease must be recognized by all purchasers.
It's a simple, effective and inexpensive way of avoiding the worst.