The surge in rents is on the minds of Quebecers. In this tense context, the Minister of Housing, France-Élaine Duranceau, tabled a bill last spring reviewing the rules for residential leases. Among the most controversial points of this proposal is the possibility for owners to refuse lease assignments “for a reason other than a serious reason”.
Assignment of lease allows tenants to transfer their existing lease, with its conditions, to a new tenant. Political and community groups, including Québec solidaire, are speaking out against the bill and want to maintain the transfers, arguing that they represent one of the rare means of accessing reasonable rent. Mme Duranceau instead believes that it is abnormal for a current tenant to be able to impose a new tenant on the owner, and believes that “clause G” is sufficient to control rents. I will explain why neither is entirely right: it is not necessary to maintain lease assignments to control rents, but clause G must then be strengthened so that it is effective.
In theory, clause G limits rent increases between two tenants. In the Quebec lease form, the owner must enter the previous rent. If the new rent is higher than the rent indicated in this section, the tenant can ask the Administrative Housing Tribunal (TAL) to set the rent, even after signing the lease.
However, in practice, this clause is far from effective. In 2022, there were only 351 such requests! The reasons likely include a lack of awareness of the remedy, as well as fear of retaliation. Furthermore, even though it is mandatory to complete clause G, in practice there are no consequences for an owner who does not do so. In this situation, the tenant can still make a request to fix the rent, but he is unaware of the potential gains.
I propose two possible solutions in order to restore teeth to clause G. First, allow pseudonymity to protect tenants, because they currently risk being refused by future owners if they make a request to fix the rent. since this last generates a file accessible to all on the Internet. Second, encourage landlords to complete this section by imposing an additional 10% discount on the rent if clause G is omitted and the tenant makes a request for rent fixing at the TAL. This would quickly change the way things are done, guaranteeing a substantial gain for the tenant in this case.
That said, is rent control a panacea? There is room for doubt, especially since the consensus of economists is generally opposed to it. But if we must have control, it must be robust and not illusory. It is not wise to remove the right to transfer a lease to rely solely on a faulty clause G. Transfers could be restricted, yes, but on condition that clause G is strengthened, in particular by allowing the pseudonymity of requests to the TAL and by encouraging owners to provide all the necessary information.