Bill 31 in Quebec: What Every Landlord Needs to Know in 2026

'''

Navigating the New Landscape: A Landlord's Comprehensive Guide to Quebec's Bill 31 in 2026

The Quebec real estate market is in a perpetual state of evolution, and 2026 is no exception. The introduction of Bill 31, officially known as the Act to amend various legislative provisions with respect to housing, has significantly altered the legal framework for residential leases. For real estate investors and landlords across the province, understanding these changes is not just a matter of compliance but a crucial component of successful portfolio management. This comprehensive guide will break down the essential elements of Bill 31, offering practical advice and actionable strategies to navigate this new regulatory environment.

Whether you own a single condo in downtown Montreal or manage a portfolio of plexes across the province, these legislative changes will impact your operations. From new rules on lease assignments to restrictions on evictions and the introduction of regulations for accessory dwelling units (ADUs), Bill 31 touches upon nearly every facet of the landlord-tenant relationship. We will delve into the specifics, referencing guidance from the Tribunal administratif du logement (TAL) and CORPIQ (Corporation des propriétaires immobiliers du Québec) to ensure you are well-equipped for the road ahead.

The End of an Era: New Rules on Lease Assignments

One of the most debated and impactful changes introduced by Bill 31 is the overhaul of lease assignment rules. Previously, tenants had a broad right to assign their lease to a new tenant, and a landlord could only refuse for a "serious reason." This often led to situations where landlords had little control over who occupied their properties, and tenants could effectively "sell" their low-rent leases on the open market.

As of February 2024, the dynamic has shifted. Under the new legislation, a landlord can now refuse a lease assignment for any reason, even if it is not considered "serious." If a landlord refuses the assignment, the lease is simply terminated on the date the assignment was set to take effect. This grants landlords significantly more control over their properties and tenant selection process.

Practical Implications:

• For Landlords: This change is a welcome one. You now have the right to vet and select your own tenants, ensuring they meet your criteria. When a tenant informs you of their intent to assign their lease, you can either accept the proposed candidate or refuse and terminate the current lease. This provides an opportunity to rent the unit at the current market rate. Tools like Gero Immo can be invaluable in this process, helping you analyze market rents and manage tenant applications efficiently.
• For Tenants: The ability to easily transfer a lease is gone. Tenants looking to leave before the end of their term must now rely on the landlord's willingness to accept a new tenant or face the termination of their lease.

Here is a comparison of the old and new rules:

Reprise de Logement: Stricter Rules for Evictions for Personal Use

"Reprise de logement," or the repossession of a dwelling for personal use by the landlord or their immediate family, has long been a contentious issue. Bill 31 introduces stricter rules to protect tenants from what the government has deemed "bad faith" evictions.

Landlords seeking to repossess a unit must now provide a greater burden of proof to the TAL that their intention is genuine. The law also increases the damages that can be awarded to a tenant if a repossession is found to be in bad faith. The compensation for an evicted tenant has been increased, and the landlord may be required to pay the tenant's moving expenses.

Key Changes to Repossession Rules:

• Increased Scrutiny: The TAL will more closely examine the landlord's reasons for repossession. Expect to provide detailed evidence supporting your claim.
• Higher Penalties: The penalties for a bad-faith repossession have been significantly increased. A landlord could face punitive damages, in addition to compensating the tenant for material and moral damages.
• Burden of Proof: The burden of proof lies squarely on the landlord to demonstrate their genuine intent to occupy the unit.

For landlords, this means that the process of repossessing a dwelling for personal use is now more complex and carries greater financial risk if not handled correctly. It is essential to have all your documentation in order and to be prepared for a more rigorous review by the TAL.

Accessory Dwelling Units (ADUs): A New Framework

In an effort to increase housing supply, Bill 31 introduces a framework for the creation and regulation of Accessory Dwelling Units (ADUs). These are smaller, independent residential units located on the same lot as a standalone single-family home, such as a basement apartment or a laneway house. The bill aims to encourage the creation of ADUs by providing clearer rules and, in some cases, overriding municipal bylaws that may have previously prohibited them.

This is a significant opportunity for homeowners and investors to add value to their properties and generate additional rental income. However, it is crucial to understand the specific requirements and regulations, which can vary by municipality.

What to Consider When Creating an ADU:

• Municipal Bylaws: While Bill 31 provides a provincial framework, you will still need to comply with municipal zoning and building codes.
• Construction Costs: Building an ADU is a significant investment. You will need to factor in the costs of construction, permits, and professional fees.
• Rental Income Potential: Research the local rental market to determine the potential income from your ADU. A tool like Gero Immo can provide valuable insights into comparable rental rates in your area. '''

Clause G and the 5-Year Rule: Changes to Rent-Setting Mechanisms

For years, landlords of new buildings (less than five years old) have been exempt from the usual rent-setting rules, allowing them to increase the rent as they see fit. This was intended to spur new construction. Bill 31 modifies this exemption. While the 5-year exemption still exists, landlords must now be more transparent.

If a landlord of a building less than five years old wishes to increase the rent beyond the amount that would normally be allowed by the TAL, they must have a "Clause G" in the lease that clearly states this. If this clause is not present or is not properly worded, the tenant can refuse the increase, and the TAL will fix the rent.

What this means for landlords:

• New Leases: For any new building, it is absolutely critical to ensure your leases contain a properly drafted Clause G. Consult with a legal expert or use a trusted lease template that has been updated for Bill 31.
• Existing Leases: If you have tenants in a newer building without this clause, you may have difficulty implementing significant rent increases until the 5-year period is over.

Enhanced Tenant Protections and Stiffer Penalties

A recurring theme in Bill 31 is the strengthening of tenant rights and the introduction of more severe penalties for landlords who do not comply with the law. The legislation aims to deter "renovictions" and bad-faith actions by making them more costly for landlords.

Key areas of enhanced protection include:

• Increased Damages: As mentioned with repossessions, the TAL now has the authority to award higher damages to tenants who are victims of illegal lockouts, harassment, or other landlord misconduct.
• Punitive Damages: The possibility of punitive damages, which are intended to punish the landlord rather than just compensate the tenant, is now a more significant threat.
• Burden of Proof: In many disputes, the burden of proof is shifting more towards the landlord. You must be able to document your actions and justify your decisions.

For investors, this underscores the importance of professional property management and a thorough understanding of the law. A single misstep can lead to a costly judgment from the TAL. Keeping meticulous records of all communications, notices, and maintenance activities is more important than ever. This is another area where a platform like Gero Immo can be a lifesaver, providing a centralized system to track tenant interactions and property-related events.

Timeline: When Do These Changes Take Effect?

While Bill 31 was passed in February 2024, not all of its provisions came into effect immediately. Here is a simplified timeline of the key changes relevant to landlords:

It is crucial to note that the legal landscape is always subject to interpretation and further clarification from the courts and the TAL. Staying informed through resources like CORPIQ and consulting with legal professionals is essential.

Strategies for Success in the Post-Bill 31 Era

The changes brought by Bill 31 are not a reason to shy away from the Quebec real estate market. Instead, they call for a more professional and strategic approach to property investment and management. Here are some actionable strategies to help you adapt and thrive:

1. Refine Your Tenant Screening Process: With the new lease assignment rules, you have more control over who rents your properties. This is a significant advantage, but it also means your tenant screening process needs to be top-notch. Develop a consistent and fair process for evaluating applicants, including credit checks, reference checks, and income verification. Remember to comply with all human rights legislation.

2. Be Diligent with Repossessions: If you need to repossess a unit for personal use, be prepared for a higher level of scrutiny. Document everything. Have a clear and honest reason for the repossession and be ready to present your case to the TAL. Given the increased penalties, it may be wise to consult with a legal expert before proceeding.

3. Explore the ADU Opportunity: If you own a single-family home with a large lot or an underutilized basement, investigate the potential for an ADU. This can be a fantastic way to increase your property’s value and cash flow. Start by contacting your municipality to understand the local bylaws and requirements.

4. Master Your Leases: Ensure your lease agreements are up-to-date and compliant with all the new provisions of Bill 31, especially Clause G for new constructions. Do not rely on outdated templates. A small investment in a professionally reviewed lease can save you thousands in the long run.

5. Embrace Technology: In this more complex regulatory environment, technology is your best friend. A property management platform can help you stay organized, track communications, and manage your finances. For prospecting and market analysis, a tool like Gero Immo can give you an edge, helping you identify properties with ADU potential or analyze the impact of rent changes on your portfolio’s profitability.

Conclusion

Bill 31 represents a significant shift in the balance between landlords and tenants in Quebec. While some of the changes may seem daunting, they also bring clarity and new opportunities for savvy investors. By understanding the new rules, adapting your strategies, and leveraging the right tools, you can continue to operate a successful and profitable real estate portfolio in 2026 and beyond. The key is to be proactive, professional, and always informed.