Régie du logement
When a lease expires, it is renewed for the same term (duration) and under the same conditions, except for a lease having a term of more than 12 months, which is renewed for 12 months only. During the renewal process, the lessor (landlord) may modify the lease — for example, by increasing the rent or modifying another condition of the lease such as heating or parking. However, he or she must notify the lessee (tenant) within the prescribed time period. Renewal without noticeA lessee who does not receive a notice of modification and wishes to renew the lease with the same conditions does not have to notify the lessor. The lease will be renewed automatically. However, in the case of a full-time student who rents a dwelling from an educational institution, the student must notify the educational institution in writing that he or she wishes to renew the lease, at least one month before it ends. The postmark attests to compliance with the renewal deadline. Notice of modification of the lease A lessor who wishes to modify the conditions of the lease (for example, rent, heating, parking) must give the lessee written notice of the modifications that he or she wishes to make, within the prescribed time period. If the lease is signed by several co-lessees, the lessor must give each of them a notice of modification of the lease. A letter simply asking the lessee whether he or she wants to continue to live in the dwelling does not constitute a notice of modification, and the lessee is not obliged to answer the letter. Lessee’s reply to the notice of modification of the lease Upon receipt of the notice, the lessee has three choices:
If a lessee does not reply to the notice of modification of the lease within the prescribed time period, he or she is deemed to have accepted the proposed modifications and the lease is renewed under the conditions proposed by the lessor. A lessee who accepts the proposed modifications is not obliged to reply to the notice of modification of the lease. The lease will be renewed automatically. A lessee who refuses the proposed modifications must notify the lessor in writing within the prescribed time period. He or she does not have to vacate the dwelling. If the parties fail to reach an agreement and the lessor contests the lessee’s refusal, the lease is renewed and the dispute will be heard by the Régie du logement. If the lessor does not contest the lessee’s refusal within the prescribed time period, the lease is renewed without the proposed modifications. Lessor who contests a lessee’s refusal If the lessor wishes to contest a lessee’s refusal of the proposed modifications to the lease, he or she must file an application to modify the lease with the Régie. Lessors who file an application to modify a lease with regard to rent are no longer bound by the amount they requested in the notice of modification of the lease. If they specify an amount in their application, the judge cannot grant an increase exceeding this amount. However, if they do not specify an amount and ask the Régie to calculate the maximum authorized amount based on the rent-fixation criteria, the increase may exceed the amount requested in the notice of modification of the lease. The Régie determines the amount of rent payable based on the revenue and expenditures for the building applicable to the calendar year preceding the end of the lease, except for preferential rent (see Definitions). In the latter case, the rent may be set on the basis of the value of comparable dwellings. Non-renewal of the lease Regardless of whether or not the lessee has received a notice of modification of the lease, if the lessee does not wish to renew the lease, he or she must notify the lessor in writing within the prescribed time period. Estimated average rent increases for 2015-2016Each year, the Régie publishes rent-variation scenarios in order to help lessors and lessees reach an agreement on rent increases. For leases beginning after April 1, 2016, but before April 2, 2017, the estimated average rent increases are:
These estimates are averages and do not take into account the specific features of each building. In the event of significant variations in certain current operating expenses, the increases may differ from the estimated averages. Operating expenses are as follows:
Building operating expenses and major work To these estimated average increases, the annual variations in municipal and school taxes and insurance must be added, as well as an additional percentage if major work was done on the building. In the case of major work on the entire building (for example, re-roofing), the cost of the repairs is allocated among the dwellings in proportion to the rent. For example, the rent increase will be higher for a dwelling with a rent of $600 than for a dwelling with a rent of $300 in the same building. In the case of major work on a specific dwelling, only the rent charged to the lessee of the dwelling is subject to a monthly adjustment. To calculate the monthly adjustment, multiply the cost of the major work on the specific dwelling by the annual rate in effect (2.5% for 2016), and then divide the result by 12. For example, for every $1,000 spent on major work, the adjustment is calculated as follows: ($1,000 x 2.5%) / 12 = $2.08 per month in 2016. Sample rent-increase calculation Rent increase for a dwelling with a rent of $600 a month: The dwelling is heated by the lessee. The rent increase amounts to: $600 x 0.4% = $2.40. In addition, the lessor did major renovation work on the dwelling’s kitchen in 2015, at a cost of $3,000. Therefore, the following amount must be added: ($1,000 x 2.5%) / 12 = $2.08 x 3 = $6.24. In this example, the monthly rent increase amounts to: $2.40 + $6.24 = $8.64. The monthly rent will thus be $609, as the result is rounded to the nearest dollar. Calculation tool The Régie offers lessors and lessees a tool for calculating rent, taking into account changes in municipal and school taxes, insurance premiums, the building’s overall operating costs and, if applicable, major work. The form Calculation 2016: How to Agree on the Rent and accompanying publication, Example of How to Use the Form Calculation 2016, are available for this purpose.
Preferential rentPreferential rent is rent for a dwelling that is less than the amount usually charged for a comparable dwelling, where:
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