What exactly represents serious damage

Article locked Published on by Me Jean-Olivier Reed

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What exactly represents serious damage

Not all breaches of the lease justify the termination of the lease.
What exactly represents serious damage?

- Analysis in the context of a frequent delay in the payment of the rent.

The basic section concerning serious damage for frequent delay is Section 1971 of the Civil Code of Québec.

1971. The lessor may obtain the resiliation of the lease if the lessee is more than three weeks late in paying the rent or, if he suffers serious injury, where the lessee is frequently late in payment.

The important term here are the words “if he.” It is well understood that in the absence of serious prejudice there will be no termination of the lease, but rather an order to pay the rent on the 1st day of the month.

A decision of the Québec Court provides possible solutions to what serious harm is in the context of frequent delay.

“In Allaire v. Bourdeau, the Court of Québec stated from paragraph 57 onward:

57 The jurisprudence teaches that the serious harm in question is not limited to a pecuniary loss or threat. Moreover, in the context of the possible application of Section 1971 of the C.c.Q., the fact of paying rent arrears at any time before judgement is not relevant.19 It is necessary, but it is sufficient that the delays are frequent and that the situation causes serious harm to the landlord.

58 The serious damage in question may be of a nature other than pecuniary 20:
• abnormal difficulties in the management of the building, multiplicity of procedures with the tenant or the court to collect rents or additional costs 21;
• worries and hassles caused by the tenant’s stubbornness in retaining his rent, time and energy devoted to peregrinations before the Tribunal administratif du logement, accounting notes and follow-up of the steps taken 22;
• constant and multiplied steps to get paid, repeated requests to the Tribunal administratif du logement to obtain payment of the rent, management of three decisions of the Tribunal administratif du logement 23;
• numerous notices sent to the tenant to remind him of his delays, delivery of the file to his lawyers to recover the rent due and costs thus incurred 24;
• multiplication of the steps to obtain the rents due and payment of bank charges for many returned cheques 25;
• impossibility of disposing of the sums due, recovery procedures and loss of interest on the money not received 26;

59 In the present case, one cannot speak of mere inconvenience caused by the Appellant’s delays. 27 The Respondents, by a preponderance of evidence, have shown, as the jurisprudence teaches, that they did indeed suffer serious prejudice as a result of the Appellant’s conduct.
60 Being owners of a single rental property, the Respondents obviously cannot be compared to important real-estate owners. Delays in the payment of rents and the steps to collect them undoubtedly create a pecuniary pressure on them. The Respondents are experiencing significant financial insecurity.
61 The evidence offered on the troubles, difficulties and inconveniences they experienced is not contradicted. The Appellant’s wrongful conduct significantly burdened the management of their building. Many losses of time were also suffered in asserting their right against the Appellant.”
 
In another decision, the administrative judge Me Francine Jodoin, (Co-op d’habitation La Petite Cité (Montréal) v. Johnson, 2018 QCRDL 29865 (CanLII)), adds the following elements to what is said above from paragraph 20 of the decision:
20 “It is therefore found that the evidence of serious harm must be complete and documented.
21 Since the termination of the lease is a serious consequence of such breaches, the law requires the demonstration of serious prejudice before terminating the lease, which is, after all, the ultimate sanction for a breach of contract.
22 Although the Tribunal does not require proof of a financial peril, an inability to meet its financial obligations or a precarious economic situation, the evidence must, for instance, reveal, by way of preponderance, an abnormal increase in the management of the building, the multiplicity of procedures with the tenant or the Tribunal, and additional costs.
23 In itself, the mere statement of the landlord’s agent in this case is insufficient to enable the Tribunal to assess the seriousness of the harm suffered.
24 Also, the evidence cannot be based solely on a mere allegation of inconvenience or expense. The harm must be proved by documentary evidence, if any, and based on objective and specific facts 2...
 
Therefore, unlike the termination of a lease for non-payment of rent where the mere proof that the rent is unpaid is sufficient to obtain the termination of the lease, the level of proof required to obtain the termination of the lease for frequent delay is much higher. It requires greater preparation by the owner and a clear and documented description of the damage suffered by the owner as a result of late payment.

As you can see, you must therefore prepare your file in advance, send several reminders to the tenant, document your own financial and mortgage situation and document delays. The landlord can no longer show tolerance to the tenant and must not be coaxed by phony excuses or feelings, which could harm your file.

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