Lease Accessory to an Employment Contract

To answer this question, one must first understand the personal right to maintain occupancy, a foundational principle of residential tenancy law. This right protects tenants against eviction except in cases expressly provided for by law.[1] In other words, subject to statutory exceptions, tenants cannot be forced to vacate their dwelling. This right is intended to ensure residential stability and to prevent individuals from being left without housing for abusive reasons. This protection, however, is not absolute. One such exception applies to leases accessory to a contract of employment.

A lease accessory to a contract of employment refers to a lease entered into solely as a result of an employment relationship. Under this type of arrangement, the employee occupies the dwelling as a tenant, while the employer acts as the landlord. In practical terms, the dwelling is made available to the employee because of his or her employment, whether due to proximity, availability, or because occupying the dwelling is deemed essential to the performance of certain duties.

Article 1976 of the Civil Code of Québec (CCQ) provides an exception to the right to maintain occupancy in the case of leases accessory to a contract of employment. A 2005 judgment of the Court of Appeal of Quebec confirms that jurisdiction to resolve legal disputes relating to such accessory leases lies with the Court of Quebec and the Superior Court, to the exclusion of the Tribunal administratif du logement (TAL).[2] The Court based its conclusion, in particular, on the fact that article 1976 CCQ is not included in the list of articles set out in section 28(2) of the Act respecting the Administrative Housing Tribunal, which defines the Tribunal’s jurisdiction.

Article 1976 CCQ provides that an employer who terminates the contract of employment may also resiliate the lease that is accessory to it. Providing a one-month notice is, in itself, sufficient for the lease to be terminated as of right. The terms of article 1976 CCQ may be amended by the parties, provided that such amendments are clearly stipulated in the lease. Conversely, if no notice is given and the employee maintains occupancy after the end of the employment contract, the lease loses its accessory character. It then becomes an ordinary residential lease fully subject to the general rental regime, under which the right to maintain occupancy applies. In such circumstances, any dispute will fall within the jurisdiction of the TAL. From that point onward, it becomes significantly more difficult for the landlord to terminate the lease.

Employees who wish to prevent the termination of their lease cannot rely on the right to maintain occupancy, given the accessory nature of the lease. Instead, they must institute proceedings under their contract of employment as an indirect means of protecting their right to housing. Among other things, employees may challenge the termination of their employment contract under the Act respecting labour standards by alleging dismissal without good and sufficient cause.[3] It should also be noted that, just like the employer, employees may terminate an accessory lease by giving notice to the employer.

For article 1976 CCQ to apply, the lease must genuinely be accessory to the contract of employment. This requirement has been examined in greater detail by the courts in several decisions.[4] These decisions remind landlords that terminating an employee’s lease is only possible where the lease can truly be characterized as accessory to the contract of employment, having regard to the overall context and the parties’ intention at the time the contracts were entered into. The mere coexistence of a lease and an employment contract is not sufficient to establish the accessory nature of the lease, as this does not necessarily imply that the lease arises from the employment relationship.

**This article was written in collaboration with Miori Racicot, a law student.**