MY LEASE, MY MONEY!
Consider the following: you are the owner of a building and are ecstatic to have a steady revenue source without hassle. After all, what can be simpler than managing a building? Hold that thought until you read the following:
Two individuals, Bill and Tom, approach you to rent a unit in your building in hopes of setting up their future company. However, since they have yet to incorporate their business, you draft the lease directly under their name.
They promptly pay the deposit, settle in, and commence their business operations. Everything is moving along smoothly until you realize that a year has passed and you haven’t received a single rental payment from Bill and Tom.
In fact, your lessees never intended to pay any rent since their business plan fell through and they no longer need the commercial space. Having always acted in good faith, you proceed to contact these individuals in hopes of receiving your due, but are swiftly turned aside at every occasion.
At this point, you’re left wondering about your options and must come to the terms that you may have to settle this matter in court.
The court will decide if Bill and Tom are personally liable. In their defense, they will deny any responsibility citing that the lease was not signed directly under their name, but on their company’s behalf.
Interestingly, Bill and Tom ultimately incorporated their company under False Promises Inc., but for reasons unbeknownst to both the court and yourself, the lease was never transferred under the company’s name even though you took the necessary steps in assuring that the transfer was executed.
Your diligence was duly noted by sending out the lease copies to Defendants (i.e. Bill and Tom) on two (2) occasions.
In the initial lease agreement you drafted between False Promises Inc. and yourself, you clearly indicated that should the lease transfer fall through or the company fail to be created, the lease would intervene between Defendants, who would be held personally and solidarily liable, and yourself.
Moreover, while Bill and Tom denied ever receiving this draft, upon following up with the courier service, you confirmed delivery and reception of the document.
Having failed to sign this initial lease agreement, you drafted a secondary version which you also sent out via courier. Unsurprisingly, Defendants refused to sign this document as well.
You may even be disappointed by Defendants’ refusal to sign this modified draft given that you were under the impression that their personal liability was already engaged from the onset of this ordeal when they signed the lease under their name.
Luckily, the evidence in this case points towards Defendants’ imprudence, negligence, and nonchalance in their business relations with you. In fact, Bill and Tom were obliged to see to the transfer of the lease under their company’s name, but chose to abandon the premises once you demanded the payment you were owed. In light of their actions and questionable decision-making, the court fails to see how Defendants will prevent triggering their personal liability.
Having always been honest and truthful towards Bill and Tom, you successfully established the validity of your request to resiliate the lease and recover unpaid rent. Thus, Defendants are solidarily responsible to pay the accumulated rent given their inability to reverse their burden of proof and the lease is officially resiliated.
In light of the forgoing, do you still believe that managing and/or owning a building is a breeze? Note that similar situations happen fairly often as all it takes is a single lessee who is of bad faith or completely uninformed of his legal obligations. You may now realize the importance of having an established, experienced lawyer who may assist you in the drafting of the lease agreement or to defend your legal interests, should the need arise. This following should serve as the perfect example to encourage you to act swiftly in taking the necessary legal actions before it becomes too late to protect your rights.
In fact, the scenario described above was a real litigious matter in the case of Immeubles Thimens Corp. vs. Rouimi which can be accessed at the following link (available only in French):
https://www.canlii.org/fr/qc/qccq/doc/2013/2013qccq9724/2013qccq9724.html?resultIndex=1
If you are looking for a law firm with reasonable rates, quick and efficient turnaround time for your files and who provides personalized and effective follow-ups, call Schneider Attorneys at (514) 439-1322 ext. 112 or email us at info@schneiderlegal.com
The above noted text should not be construed as providing legal advice or a statement of your claim. The process highlighted above are merely parameters and barometers and do not constitute any warranties and guaranties with regards to your file at hand. We strongly recommend that you seek legal advice with a licensed attorney from the Barreau du Quebec or a notary at the Chambre des Notaires. Each case must be seen and analysed on its merits as the legal process may be complex and cumbersome.
