When you live in a rented dwelling (as lessee), feeling at home is crucial. Likewise, when you lease a dwelling that you own (as lessor), you want your property to be in the hands of responsible tenants. What are the specific aspects of residential leasing? And how can a broker help you sort out what your obligations are versus those of the other party?
Residential leasing is a transaction that requires the signing of a residential lease; it can involve a house, an apartment, or a room.
Important: Rules are different for the leasing of commercial or vacation properties.
THE ROLE OF THE BROKER
The Real Estate Brokerage Act and the regulations thereunder also apply to leasing. The broker has the same duty to verify, inform and advise whether the transaction concerns the leasing, purchase or sale of a property.
A broker who offers residential leasing services must have additional knowledge specific to this field. He must be familiar and comply with the Real Estate Brokerage Act, the Act respecting the Tribunal administratif du logement, as well as the rules that apply under the Civil Code of Québec. He also has a duty to advise his client regarding all the above legislation.
In addition, he takes care of all the steps involved in the transaction:
- coordinating visits,
- completing the promise to lease with the lessee;
- recommending that the lessee read the by-laws of the immovable if the dwelling is located in a property held in divided co-ownership;
- if applicable, taking the necessary steps to obtain the lessee’s consent so that the lessor can check his payment habits;
- ensuring visibility of and advertising the dwelling for lease.
It is important to know that the real estate broker represents the party to which he is bound by contract. However, he also has a duty to treat the other party fairly. He must find a happy medium in every situation, and contribute to the successful signing of a lease.
The broker’s rate or percentage of remuneration is not fixed by the Real Estate Brokerage Act or by the OACIQ, nor by any law for that matter, whether it concerns a purchase, sale or lease.
Rather, remuneration is based on free competition. It all depends on the broker’s business model. This is something you must discuss with your broker, since these terms will become part of your brokerage contract.
MAIN OBLIGATIONS OF THE LESSOR AND THE LESSEE
Whether you are a lessor or a lessee, it is recommended to visit the Tribunal administratif du logement website and to read the following leaflets:
- Access to the dwelling and visiting rights
- Joint tenancy
- Repossession of a dwelling
WHAT ABOUT CO-OWNERSHIP PROPERTIES? (CONDOS)
Condo leasing is becoming more and more common. But did you know that, even as a tenant, you must abide by the rules set out in the property’s by-laws? For example, these rules may restrict the use of certain common portions or of the elevator (on moving days), or they may prohibit animals. The broker can make things easier for you, whether you are the leasing owner or the tenant.
As part of a residential lease, the broker must use certain mandatory forms. Keep in mind, however, that these forms may not be used for subleasing.
- Exclusive brokerage contract – Residential lease
- Promise to lease – Residential and Counter-proposal – Residential lease
- Amendments – Residential lease
- Consent to check payment habits
WHAT ABOUT SUBLEASING?
Whereas the leasing of a residential dwelling binds the lessor to the lessee, subleasing binds the lessee to a sublessee. The OACIQ has created two forms that the broker can use for subleasing a dwelling.
These forms are not to be used for the assignment of a lease, by which the lessee is fully released from his lease by assigning his rights and obligations to the assignee.
For more information on the difference between a lease assignment and a sublease, please refer to the following leaflet on the Tribunal administratif du logement website: