CONSEQUENCES RESULTING FROM THE ISSUANCE OF AN ILLEGAL CONSTRUCTION PERMIT

Municipalities are generally entrusted to administer land use planning laws and regulations affecting construction, usage and protection of the environment. Usually an inspector or other officer is entrusted with interpreting and applying such rules and standards which can be quite complex. What are the consequences of the issuance of a construction permit that is contrary to land use planning or environment protection laws and regulations to an owner who was diligent, acted in good faith and relied upon the expertise of the municipal officer? Must the municipality require the demolition of the illegal construction and if so, must the municipality indemnify the owner for the costs of construction and well as moral damages (lost time, inconvenience, aggravation)? In Côté v. Dionne et al., 2026 QCCS 3038, plaintiff believed in error that the vacant land that he purchased was buildable and sued the seller to cancel the sale and the municipality for damages. Plaintiff alleged to have been misled by the municipality that he could indeed build on the land. The court cancelled the sale on the ground that plaintiff’s consent to purchase was vitiated by an error regarding an essential element of the purchase. As for the liability of the municipality, it is subject to the general rules of liability in non-contractual matters i.e. fault and damages as a direct result thereof. The court found that the town officer, although well intentioned, was negligent in communicating inaccurate information to the plaintiff, who acted reasonably by relying upon the erroneous information provided by the officer of the town. The town was ordered to pay plaintiff the symbolic amount of $20,000 for trouble and inconvenience. In the Quebec Court of Appeal decision of St-Onge v. Municipalité de Saint-Hippolyte, 2000 canlii 9585, appellant appealed from a decision of the Superior Court that dismissed his claim in damages against the town. Appellant acquired vacant land with the intention of building a shopping center. Since that land was not serviced by the town sewer system, appellant had to install his own septic system. He consulted the town inspector who, after inspecting the land and conducting various tests, issued a permit in 1987 for the installation of a septic system and its connection to the building that appellant had built on the land. In 1990, the town retained an expert to study the soil in certain sectors who concluded that appellant’s shopping center was polluting the soil due to the fact that appellant’s septic system was installed in the vicinity of a high groundwater table. As a result, appellant had to abandon the existing septic system and build and instal a new one at a different location. Applying the principle that a municipality is liable for damages caused by its inspector pursuant to the issuance of a construction permit contrary to established legal standards, the town was condemned to pay damages in the amount of $68,064.71 including the costs of acquisition of additional land, professional fees, costs of installation of new septic system, trouble and inconvenience. Notwithstanding the town’s negligence when issuing an illegal permit, when the consequences result in prejudice to the environment or to neighbours, the town may apply to the Superior Court to order the owner to take corrective action or if not possible, to demolish the derogatory construction pursuant to Articles 227 and 227.1 of the Act Respecting Land Use Planning and Development, RLRQ c A-19.1. In the Quebec Court of Appeal decision of Ville de Montréal v. Chapdelaine et al., 2003 canlii 28303, both the Superior Court and the Court of Appeal refused to issue such an order, thereby allowing an illegal construction to persist. In 1966, the owner of a commercial property converted it to nine residential dwellings. The owner affirmed that a permit had been issued by the city, which was not able to confirm or deny it. Since then, the property had been continually occupied by residential tenants. However, the conversion to residential was contrary to the zoning by-laws then in effect and therefor, could not benefit from acquired rights. The city applied to the Superior Court to order the owner to render the property in conformity with the zoning by-law. Both the Superior Court and Court of Appeal concluded that Article 227 confers upon the court a certain discretion which, in particular and exceptional circumstances, it could exercise to deny the application of the city. The discretion extends to the choice of the appropriate remedy tp correct the derogatory situation but also, exceptionally, when the circumstances warrant it, the possibility to reject the recourse altogether. Such discretion should be used to alleviate an unjust consequence that would result from a strict and blind application of the regulation. Such discretion may be exercised to preserve, when particular circumstances warrant, a balance between the public interest and that of the individual property owner. The particular and exceptional circumstances of this case include the following: • the derogatory situation existed for 35 years • the transformation from commercial to residential had been carried out pursuant to a permit • the city had attributed civic addresses to each of the nine dwellings • the property had been inspected multiple times in the past by employees of the city without the issue having been raised • The owner’s request to the city to change the zoning to correct the problem was denied • The derogation did not harm the environment • No complaint was made by any neighbour regarding the property An interesting decision rendered by the Superior Court concerned the determination of the legality of a resolution of the Gatineau city council authorizing a minor derogation in favour of a residence. Stinson v. Ville de Gatineau, 2021 QCCS 3049. Neighbours unhappy with the minor derogation applied to have the minor derogation annulled on the ground that the derogation was not minor and was contrary to regulations of construction, zoning, and land use planning. They also asked that the property be demolished at th owner’s sole cost and expense. The owner also sued the city in damages, including building and demolition costs. Shortly after purchasing the property, the owner obtain a construction permit to build a retaining wall facing the river and a permit authorizing the construction of a residential building. In September 2013, the city realized that the construction permit was issued contrary its by-laws. The city informed the owner in October who advised him to obtain a certificate of location from a certified surveyor. The owner subsequently learned that the city’s urban planning committee recommended that city council grant a minor derogation and that the next step was only a formality. Construction continued normally and the owner moved into the new residence in February 2014. In June 2014, the owner learned that an application for a minor derogation would be presented to city council and that his neighbours would be contesting it. The owner alleged that the city acted dishonestly in allowing the construction to continue while knowing the consequences of its decision. Moreover, the owner was outraged that the city deliberately chose to protect its own interests over those of the owner and his neighbours. In the circumstances, the owner sued the city for $3,630,000 in compensatory and punitive damages, including the cost of construction and of the land, interest, moving costs, lost time, legal fees, loss of enjoyment of the property, and trouble and inconvenience. The city argued that the fault lay with the professionals hired by the owner (architect, surveyor) who allegedly failed to correctly apply the zoning by-law. The purpose of a minor derogation is to remedy the rigidity that may sometimes be excessive of zoning and land planning by-laws by avoiding the long and complex procedure of modifying municipal by-laws. The granting of a minor derogation must satisfy the requirements of articles 145.1 and following of the Act Respecting Land Use Planning and Development. In particular, the minor derogation can only be granted if the application of the by-law would cause a serious prejudice to the applicant. It cannot be granted if it would cause serious prejudice to the enjoyment of property by neighbours. The resolution could affect work in progress or already completed as well as work carried out in good faith pursuant to a construction permit. In the circumstances, the court concluded that the application of the neighbours was well founded and annulled the city council resolution granting the minor derogation. As for the remedy, although the city asked the court not to order the demolition of the residence, it did not propose any alternative solution. Considering also that the evidence did not support any other satisfactory remedy, the court ordered the demolition of the residence. The owner’s claim for damages is still pending before the Court.

SAFEGUARD ORDERS AND COMMERCIAL LEASES

Disputes between landlords and tenants may take months or years to resolve before the courts. In the meantime, the tenant may not be paying rent or the landlord may not be providing peaceful enjoyment of the premises to the tenant. In such circumstances, either party may apply to the court for a safeguard order to manage the relationship until a final decision of the court is forthcoming. A recent decision of the Quebec Superior Court provides an interesting illustration of the principles involved. Immeuble 1001 Rue Lenoir (RCA) Inc. vs. 7932260 Canada inc et al., 2026 QCCS 758. Plaintiff landlord, the owner of the property, entered into two commercial leases with the defendant tenant for premises in the property: one for a daycare and the other for an art studio. The second defendant guaranteed the obligations of the tenant. In November 2024, the tenant ceased paying the rent and the landlord applied the security deposit to reduce the arrears. The tenant cured its default a few months later. In August 2025, the tenant once again ceased paying the rent. The landlord filed suit to collect the arrears of rent coupled with an application for a safeguard order to require the tenant to continue to pay the rent for both leases until a judgment on the merits could be rendered. At the court hearing, the tenant offered to pay the “minimum rent” as defined in the leases to one of the lawyers in trust and to pay the “additional rent” directly to the landlord. A safeguard order is a discretionary measure and far from automatic. Its purpose is maintain a fair balance between the rights and obligations of the parties for a limited period of time i.e. until the parties can prepare and present their case to the court for a ruling. To obtain the issuance of a safeguard order, the landlord must establish urgency; an appearance of right; that he will suffer serious or irreparable prejudice if the order is not issued; and that the balance of inconvenience favours the issuance of a safeguard order. These criteria must be considered globally. The Court was satisfied that the matter was urgent and that the landlord had established an appearance of right. The refusal of the tenant to pay rent was based upon an unconvincing argument that the landlord was in default to provide peaceful enjoyment of the premises. Moreover, a clause in the leases precluded the tenant from unilaterally setting off any amount from the rent based upon an alleged claim. Considering that the arrears of rent were in the amount of $82,500 and would increase at the rate of $28,400 per month, it was clear that without a safeguard order, the cessation of the payment of rent would cause the landlord a serious prejudice. As for the balance of inconvenience, the tenant argued, without convincing evidence, that it was losing money due to the loss of clients at the daycare. Inversely, without a safeguard order, the arrears of rent would continue to accumulate. At first glance, the Court observed that it would be tempting to consider the tenant’s offer to split the rent between the landlord and a lawyer’s trust account as a means of establishing a degree of equilibrium between the divergent positions of the parties. On the further thought, the Court was convinced that considering the strong appearance of right of the landlord, the tenant’s offer was likely destined to create negotiation leverage with a view to convince the landlord to accede to its demands. This was not, in the court’s view, the purpose of a safeguard order. The application for a safeguard order was granted.

ACQUISITION OF TITLE TO REAL PROPERTY RESULTING FROM POSSESSION AFTER TEN YEARS

Article 2910 of the Quebec Civil Code ("CCQ") defines acquisitive prescription as a means of acquiring the right of ownership through possession. To assert the right of ownership, the possessor must prove that he has possessed the property as owner for at least ten years. The possessor retroactively acquires ownership of the property by prescription, effective from the date of taking possession of the property, notwithstanding that title may be registered at the land registry office in someone else's name. Acquisitive prescription results exclusively from effective possession of real property for at least ten years. In order to register title, a judgment is required to recognize the acquisition. The judgment does not grant title, it merely serves to recognize or declare it so that it can be registered. The existence of effective possession requires a combination of two elements: one material (the corpus) and the other intent (the animus). (1) The corpus of possession refers to physical control of the property taking the form of material acts of use, occupation, enjoyment, or transformation of the property. It is not necessary for an act of possession to leave traces or tangible signs. The corpus may take the form of maintenance work. (2) Animus is the possessor’s intention to act as the true owner of the property. To ease the burden of proving animus, the legislature provides for a presumption of animus when the corpus is proven. Without the existence of animus, physical control of property (corpus) amounts to simple detention rather than effective possession which is required to acquire ownership through acquisitive prescription. To be effective, possession must be "useful", that is, it must be exercised in a peaceful, continuous, public, and non-ambiguous manner pursuant to Article 922 CCQ. These characteristics mean the following: Peaceful To be peaceful, possession must not begin with violence and must exist without offending or violating any notice from the registered owner. Continuous Possession is continuous if the possessor performs regular acts at regular intervals. Article 925 CCQ establishes a presumption that current possession is presumed to have been continuous since the day possession began. Furthermore, possession remains continuous even if its exercise is prevented or interrupted. Public Possession is public to the extent that it is not clandestine or carried out with a view to not being noticed. It must be apparent to others. Non-equivocal Non-equivocal possession is unambiguous and exclusive. Exclusivity constitutes an important criterion for assessing the nature of possession. Possession is ambiguous when the possessor’s acts compete with those performed by others. When acts of possession do not reveal animus, equivocal possession arises. Any equivocal act is interpreted in favor of the registered owner. It is incumbent upon the possessor to prove useful possession for at least ten years. Certain presumptions exist to facilitate the task. The animus is presumed from the material act of possession. Art 921 CCQ Actual possession is presumed to have been continuous since the date that possession commenced by the current possessor or his predecessor(s). Art. 925 CCQ The possessor is presumed to be the owner of the real right that he exercises. "A person contesting the presumption has the burden of proving his own right and, as the case may be, that the possessor has no title, a defective title, or defective possession". Art 928 CCQ Physical control of the property is a question of fact which may take different forms. For example, without limitation: storage of objects; installation of furniture; planting of flowers or plants; maintenance for landscaping. Regarding landscaping, where use of the property is not exclusive but concurrent between neighbours, landscaping for aesthetic purposes has been held to be examples only of good neighbourliness and lacking the corpus and animus required to establish acquisitive prescription. See Monito c. Bédard, 2025 QCCS 830, par. 45-47, 50; Kilian c. Allard, 2022 QCCS 836, par. 35, 55-59. In addition, geography and the configuration of the property may be relevant. For example, the existence of a retaining wall that is not on the official property line or exclusivity of access to the disputed parcel from the possessor's property may support the possessor's claim. It may happen that the claim of ownership based upon acquisitive prescription is contested for the reason that the possession is not exclusive but jointly exercised by two neighbours. Acquisitive prescription may also apply to ownership of dismembered rights to property as opposed to full ownership. For example, undivided co-ownership of a parcel of land. In such a case, the unambiguous character of possession adapts to the context where the useful possession is not exclusive but joint between two or more possessors. The parties must use and maintain the property jointly to satisfy the conditions of acquisitive prescription. If so, they will be declared joint undivided owners of the property. Prud'homme c. Prud'homme et al., 2020 QCCA 1547.

THE SELLER'S LEGAL WARRANTY OF QUALITY IS CONDITIONAL UPON THE EXERCISE OF PRUDENCE AND DILIGENCE BY THE PURCHASER

Introduction The recent Quebec Superior Court decision of Paquette v. Bélanger, 2026 QCCS 430 provides an interesting illustration of the applicable legal principles. Purchaser claims $107,802 from Seller pursuant to the acquisition of a residential duplex in March 2015. Purchaser claims that the property does not comply with municipal regulations regarding both zoning and construction. More particularly, renovations to convert a balcony to an annex were carried out by the Seller without a permit which allegedly precludes Purchaser from obtaining a permit to carry out corrective work since the renovations that the Seller carried out were structurally unsound. Furthermore, the distance between the annex and the property line was less than legally required by the zoning by-law. Prior to purchasing the property, the inspector hired by Purchaser recommended that she obtain from the Seller all documents relating to the renovations carried out by him. for renovations carried out by the Seller's predecessor(s) (Seller purchased the property 2022-10-19), it was recommended that she obtain all relevant permits and documents from the city. It was also recommended that she consult a structural expert to verify the annex that appeared to have shifted. Purchaser obtained a copy of the certificate of location dated 2012-10-02 which affirmed that the constructions on the property complied with both construction and zoning regulations. However, it obviously did not apply to renovations carried out by the Seller posterior to his acquisition of the property. Applicable Legal Principles Article 1725 of the Quebec Civil Code provides that the seller legally warrants the conformity of the property with the law. However, the warranty would not apply in the event that a prudent and diligent purchaser could have discovered the non-conformity from the nature, situation or use of the property. The analysis is a two-step process: first, determine if the non-compliance with the applicable regulation has a significant negative impact on the property; second, determine whether the presence of material indicators exist that would lead a person acting reasonably to suspect the existence of the negative regulatory impact. The Court found that contrary to what the Purchaser alleged, the evidence did not establish that the city refused to issue a permit for the corrective work nor that it required the demolition of renovations that were done without a permit. The evidence in fact established that the Purchaser did not transmit within the prescribed delays, which in fact were extended by the city, documentation required review the request for a permit to carry out the corrective work. The Court concluded that with regard to the first phase of the analysis, the property was in fact not compliant with municipal zoning law because the annexe was built without a permit and too close to the boundary and as a result, a derogation would be required to regularize the situation. With respect to the second phase of the analysis, the Court noted that the Purchaser was made aware of the structural issue by her inspector and was advised to verify with the city whether a permit had been issued for the renovations carried out by the Seller i.e. that the property was in compliance. The Court decided that a person moderately informed acting reasonably would have obtained the satisfactory assurances which she neglected to do. Moreover, the Court found that the Purchaser knowingly chose to accept the risk and proceed with the purchase of the property in the state that it was in instead of taking reasonable steps to shed light on the problems the responsibility for which she now attributes to the Seller. Purchaser also alleged the existence of a structural defect. However, although her inspector recommended that she retain a structural expert to verify the issue, she neglected to do so. The Court, referring to case law, found that the simple possibility that a purchaser had an opportunity to discover the presence of a defect but does nothing could constitute negligence and confirm that the defect is apparent and therefore not the responsibility of the seller. Conclusion Purchaser would be well advised to use reasonable efforts to identify risks regarding the property and if necessary, negotiate responsibility for dealing with the consequences of such risks with the seller before purchasing the property.