Quebec Commercial Eviction Process: Rights & Timelines

Governed by the Civil Code of Québec (which came into force on 1 January 1994), the process for evicting a commercial tenant for non-payment or breach of lease is much more straightforward than residential cases. However, it still requires following strict legal procedures through the regular court system rather than the Tribunal administratif du logement (TAL).

Resolving Disputes and Jurisdiction

In Quebec, commercial lease disputes do not go to the Tribunal administratif du logement (TAL). They must be filed in civil court:

• Cour du Québec: Has exclusive jurisdiction for claims where the value of the subject matter or the amount claimed is less than $75,000. It has concurrent jurisdiction with the Superior Court, at the plaintiff's option, where that value or amount is equal to or exceeds $75,000 but is less than $100,000, exclusive of interest.
• Superior Court of Quebec: Has jurisdiction for claims of $100,000 or more, or when seeking an injunction, and is the court of original general jurisdiction for matters not exclusively assigned to another court.

Terminating the Lease for Non-Payment

If a commercial tenant stops paying rent, the landlord has powerful legal tools at their disposal to recover the space and the owed funds.

1. Notice of Default

The first step is always to serve the tenant with a formal written Notice of Default (Mise en demeure). The commercial lease agreement will dictate how many days the tenant has to "cure" the default (usually 5 to 10 days for rent arrears).

2. Termination clause (Clause résolutoire)

A well-drafted commercial lease includes an automatic termination clause (clause résolutoire). If the tenant fails to pay within the cure period specified in the Notice of Default, the lease can be considered terminated automatically without requiring an initial court judgment. The landlord can then demand the tenant leave immediately.

Warning: If the tenant refuses to leave after the lease is terminated, the landlord cannot simply change the locks. The landlord must obtain an eviction order from the court and use a bailiff (huissier) to execute the eviction.

The Landlord's Privilege (Droit de Rétention)

Under the Civil Code of Québec, the specific 'lessor's privilege' (droit de rétention) that allowed landlords a priority claim over a tenant's movable property for rent arrears and up to six or twelve months of future rent was abolished in 1994. Commercial landlords no longer benefit from a similar right to distrain. Instead, landlords typically rely on other forms of security such as movable hypothecs on the tenant's property, letters of credit, security deposits, or personal guarantees.

Article 2651 of the Civil Code of Québec lists prior claims, including 'the claims of persons having the right to retain movable property, provided that the right subsists' (CCQ Art. 2651(3)). This is a general right of retention, not the specific landlord's privilege for rent arrears that existed prior to 1994.

Seizure Before Judgment (Saisie avant jugement): If a commercial landlord has reasonable grounds to believe the tenant is about to secretly move their equipment out of the premises to avoid paying rent, the landlord can apply to the court for a 'seizure before judgment' (saisie avant jugement), which is a general civil procedure remedy. This allows a bailiff to immediately lock down and seize the assets inside the building before a trial even happens.

Ending a Lease Naturally

A commercial lease with a fixed term (e.g., 5 years) simply ends on the final day specified in the contract. No formal eviction notice is required from the landlord if the tenant is expected to leave. However, if a commercial tenant remains on the premises for more than ten days after the expiry of a fixed-term lease without opposition from the landlord, the lease may be 'tacitly renewed' (reconduction tacite) for one year, or for the term of the initial lease if it was less than one year, under the same conditions. The renewed lease is also subject to tacit renewal.

If the commercial lease does not have a fixed term (an indeterminate lease), the landlord must provide written notice to terminate it. The minimum notice period required by the CCQ is the same as the rent payment period (e.g., one month's notice if rent is paid monthly).

Tenant Bankruptcy

The rules change dramatically if a commercial tenant files for bankruptcy or insolvency protection. Federal laws (the Bankruptcy and Insolvency Act or the Companies' Creditors Arrangement Act) supersede provincial lease clauses.

• Landlords cannot evict a tenant or seize their assets simply because they filed for bankruptcy.
• A bankruptcy trustee may have the right to disclaim (break) the commercial lease or assign it to a new tenant, despite what the lease says.

How Landager Helps

An effective commercial eviction process starts long before the tenant stops paying. Ensure your leases have strong default and automatic termination clauses. Landager allows you to store and quickly access your commercial leases and guarantor documents, ensuring you can hand a clean file to your attorney the moment a default occurs.

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