Register your commercial lease to be enforceable against third parties!
If you’re a tenant or landlord and would like your lease to be made enforceable against third parties such as, future buyers of the property or mortgage creditors, it is recommended that your lease be registered on the title!
This article on the technicalities and methods of publishing a commercial lease.
In Québec, the legal concepts applicable to leasing are found in the provisions of the Civil Code of Québec (CCQ). Leases of either movable or immovable property can be published, as specific rules apply to each of these categories of property.
It is noteworthy to mention that the nature of leasing has been legally defined as a personal right and the publication of such right is made possible by section 2938 al. 3 CCQ.
The publication of a lease on movable property will be published in the Register of Personal and Movable Real Rights, as the lease of an immovable property will be registered in the Land Register, as provided by section 2970 CCQ.
For a commercial lease to be registered in Québec, section 2981 CCQ provides that such registration must include the description of the property concerned and the particulars prescribed by law, such as the cadastral information of the leased premises.
An application for registration of a commercial lease can occur in many ways as stated at section 2982 CCQ.
The first method of registering a lease is by presenting the lease in full. In this context, if the lease is presented in full, section 2995 CCQ provides that it must be signed before a Québec notary or it can be signed before two witnesses one of which is under oath. If the lease is certified by a notary, the notary shall first verify the identity, status and capacity of the parties to the lease. Thus, the notary who drew up the lease may produce an excerpt of the lease and omit to produce the sensitive details of the lease, such as the rent and other particulars that the parties wish to not make public. On the other hand, if the lease is not notarized, the lease must be registered in full without omitting to include any sensitive information.
Secondly, a commercial lease may be registered by presenting a summary of its contents. This manner of registration requires parties to disclose all sensitive information in the lease, as well as presenting the lease itself so that it can be consulted and conserved. Therefore, this manner of registration presents the issue of having to disclose all information.
Thirdly, one can register a commercial lease by means of providing a notice, as stated in section 2999.1 CCQ. Most commercial leases are registered in this manner as the content of the notice is set out to ensure the confidentiality of financial information. The content of such notice must include specific information required by law such as, the identity of the landlord and tenant, the description of the property in which the leased premises are located, the date the lease comes into effect, the date of termination of the lease, the rights regarding the renewal of the lease, etc. This notice must additionally be certified by a notary or a lawyer.
Lastly, it is important to note that section 2936 CCQ prohibits the rights of parties to contract out of their right to register their commercial leases. Therefore, the landlord can no longer restrict the tenant’s right from doing so.