5 Things to know for a commercial landlord after the abandonment of the premises by the tenant
If a tenant abandons the commercial premises, the following are the steps to be taken to enforce his rights and prevent further losses and consequences due to the tenant’s actions:
- Ensure that the premises are returned in a broom clean condition (1890-1891 C.c.Q.):
- The landlord is entitled that the tenant leaves the premises in the same condition as when he commanded occupation except for normal wear and tear. In addition, all constructions, works and plantations shall be removed.
- Where a landlord must spend monies due to the violation of the lease in order to repair the premises, all expenses can be claimed back to the tenant as a non-fulfillment of his obligation except for normal wear and tear.
- Mitigate his damages (1479 C.c.Q.):
- The landlord has the obligation to mitigate his damages by seeking to re-rent the premises. The burden of proof shall be on the landlord; thus, he will have to prove that he minimized his damages.
- Certain factors can demonstrate the landlord’s will to re-rent the premises such as signs, electronic and paper advertisements, publicity expenses, etc.
- The landlord must demonstrate his good faith to re-rent the premises as it will have an impact on future compensation and damage claim as any claim is based on proportionality and reasonableness (Art. 6-7-1375 C.c.Q).
- Claim the reimbursement of extrajudicial expenses:
- An important case, Van Houtte[1], illustrates that the landlord can claim reimbursement of attorney’s fees and legal costs as extrajudicial expenses against the tenant (1863 C.c.Q.) when there is a clause in the lease.
- Nevertheless, this clause must be written clearly in order to increase the chances of success for the landlord (1373-1374 C.c.Q).
- For these reasons, it is recommended to have a clause in the lease regarding the services of attorney and reimbursement of legal fees in the event of default of the tenant.
- Claim the difference in rent and other damages (1607 C.c.Q.):
- The landlord can claim different damages for the prejudice suffered resulting directly and immediately from the abandonment of the tenant. In particular, the difference in rent, repair costs, maintenance and operating expenses, etc.
- Regarding the loss of rental income, the landlord can claim the difference perceived as liquidated damages for the non-fulfilment of a contractual obligation by the tenant (1863 C.c.Q).
- As soon as the tenant abandons the premises, the current month, as well as between six (6) to twelve (12) months of future rent may be claimed, based on the factual situation, the specific liquidated damage clause in the lease and circumstances between parties in accordance with the applicable case law.
- The court has discretion to reduce the liquidated damage claim if it is abusive or disproportionate to the prejudice suffered by the landlord or to avoid double indemnity.
- The landlord can only make a claim for arrears of rent that are not prescribed pursuant to section 2925 C.c.Q., (prescription is three (3) years).
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- Resiliation of the lease:
- The resiliation of the lease will be justified when the tenant abandons the premises as he failed to perform his contractual obligations in a repetitive manner (1605 C.c.Q). This procedure will usually be filed jointly with the damage claim.
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[1] Groupe Van Houtte inc. (A.L. Van Houtte ltée) c. Développements industriels et commerciaux de Montréal inc., 2010 QCCA 1970 (CanLII)
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The above noted text should not be construed as providing legal advice or a statement of your claim. The process highlighted above are merely parameters and barometers and do not constitute any warranties and guaranties with regards to your file at hand. We strongly recommend that you seek legal advice with a licensed attorney from the Barreau du Quebec or a notary at the Chambre des Notaires. Each case must be seen and analysed on its merits as the legal process may be complex and cumbersome.
