Arbitration in case of conflict between the parties to a commercial lease

Method of conflict resolution between tenant and landlord

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514 374-4303

More and more, commercial leases contain arbitration clauses. These clauses allow the parties to avoid going to court in case of a dispute between the landlord and the tenant.

Arbitration takes the form of a private tribunal where the case is heard by one or more arbitrators chosen by the parties.

To initiate the process, the parties must submit an arbitration request to the arbitrator. Upon receiving this request, the arbitrator prepares an Arbitration Agreement that must be signed by all parties.

The arbitrator then determines the proceedings of the procedure. The parties are free to be represented by a lawyer and to present their own expert witnesses. Once the instructions are completed, the arbitrator issues a written decision that is binding on the parties. This decision can be enforced by a court in case of non-compliance.

For information, you are invited to consult the arbitration rules of the "Association des notaires arbitres du Québec". Members of the Association are subject to ethical rules.

We cannot provide an exhaustive list of the different situations where an arbitrator can intervene, but here are some examples:

If the tenant:

  • abandons the premises before the lease expires, without the landlord's authorization or following a judgment rendered against the tenant;
  • does not comply with one or more conditions of the lease;
  • changes the intended use of the leased premises;
  • transfers ownership of their business or assigns their rights in the lease without notifying the landlord.

If the landlord:

  • does not provide the tenant with peaceful enjoyment of the premises;
  • does not provide the required services to the tenant according to the terms of the lease;
  • refuses to repair the building;
  • changes the terms of the lease unilaterally.

If the landlord and tenant do not agree on the terms of a renewal clause. Why let a dispute escalate and become burdened by court procedures? Arbitration, more than a means, is a more civilized solution to a dispute. Arbitration is therefore a dynamic solution that responds well to the economic imperatives of the contemporary world, where disputes must be resolved quickly while minimizing costs.

The main advantages of arbitration are confidentiality, expedited process, and cost limitation:

  • Confidentiality: It is a form of private justice as opposed to common law courts, which are open to the public.
  • Expedited process: The arbitrator must be requested by the parties to render a decision within a short period of time. This decision is binding and not subject to appeal. In practical terms, this can be done within six (6) months.
  • Cost limitation: As the decision is final and not subject to appeal, the costs are significantly reduced.

Parties who wish to use an even more flexible form of conflict resolution may be better advised to use mediation.

Due to their training and experience, notaries are specially called upon to be impartial between the parties to a contract. They are obliged to provide advice so that the decision and consent of the parties are well-informed. Notaries are the appropriate professionals to act as arbitrators in a dispute.

We invite you to submit your arbitration request to Notaire-Direct®, which will meet your needs.

If you need more information on this service, please contact us
514 374-4303
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