Quebec law gives tenants a right to remain in their leased dwelling and controls the amount of rent that a landlord can charge. There are some limited exceptions, including:
· the right to retake possession to reside there himself or for an ascendent or descendent in the first degree or any other relative for whom he is the principal means of support;
· for a spouse or ex-spouse for whom he is the principal means of support;
· to subdivide the dwelling, enlarge it substantially or change its destination. (Article 1957 and ff. CCQ).
A landlord who exercises a right to retake possession in bad faith could be liable to pay both compensatory and punitive damages to the tenant, even if the tenant consented to leave. An interesting illustration can be found in the decision of the Tribunal Administratif du Logement at 2022 QCTAL 13865.
Context
The tenants took possession of a nine room cottage on 2015-07-15 in virtue of a two year lease at a monthly rent of $3000, which was tacitly renewed on 2017-07-01 for 12 months.
The lease ended on 2018-06-01 pursuant to an application by the landlords to retake possession for their daughter. The tenants received an indemnity in the amount of $6000.
The tenants moved to a different house in the same area at a monthly rent of $3500.
From 2018-10 to 2019-02, the landlords' daughter, who worked in the performing arts, used the house sporadically to practice but never resided there.
On 2019-03-15, the house was sold for the price of $905,000 with immediate possession. The promise to purchase was dated 2019-02-03 and accepted on 2019-02-21.
Convinced that their rights were breached, the tenants filed suit claiming the following:
· $6000 pecuniary damages calculated as the rental difference of $500 per month during 12 months;
· $4000 moral damages (aggravation and stress);
· $45,250 punitive damages representing 5% of the proceeds of sale ($905,000).
A real estate agent gave expert testimony that it is easier to sell a vacant house rather than one that is occupied by a tenant, which generally results in a sale price that is 5% higher.
Some other evidence that the court retained included:
· the landlords did not inform their daughter of their plans until after they already commenced the process of retaking possession;
· the daughter was never interested in residing in the house;
· the fact the house was put up for sale in September 2018, only a few months after repossession by the landlords, corroborates the position of the tenants that they were victims of the landlords' bad faith.
Decision
The Court maintained the tenants' application. It granted material damages in the amount of $3000, considering that although they paid a higher rent after moving, their new premises were superior.
The Court refused the claim for moral damages, considering the indemnity of $6000 that the tenants received from the landlords when they moved.
The Court granted punitive damages in the amount of $30,000, taking into account the landlords conduct, their net worth and their capacity to pay.
The Court noted that the punitive damages are evaluated with the following purposes in mind: prevention, dissuasion and public condemnation of similar conduct. In other words, a wealthier perpetrator would be expected to face a higher punitive damage award in order for the award to achieve its purpose.
