Standard clauses - 5 - Other clauses
5.1 - Security deposit - Lease of a property as a vacation resort only
5.1 – Security deposit - Lease of a property as a vacation resort only
With this promise, the LESSEE pays the sum of ______ dollars ( $ ______ ) as security deposit made by cheque to the order of __________________ (name of broker receiving the sum)________________________ in trust, hereinafter called the TRUSTEE.
Upon signing of the lease, the TRUSTEE shall deposit the cheque in a trust account until disposed of in accordance with this clause. The purpose of the deposit is to guarantee the LESSEE's obligation to surrender the PREMISES, including furnishings and other accessories, in the condition in which they were received, except for changes resulting from normal aging, wear and tear or superior force, and final payment of any sum due to the LESSOR under the lease, including any charge assumed by the LESSEE.
The LESSOR shall have 5 days following the expiry of the lease to verify that the obligations under this clause have been fulfilled and, in case of non-fulfilment, to notify the TRUSTEE in writing not to refund the deposit to the LESSEE. After this deadline and in the absence of a notice from the LESSOR, the TRUSTEE shall refund the deposit to the LESSEE. Otherwise, the TRUSTEE shall only dispose of the deposit in accordance with the written instructions of the parties or an order of the court.
Note: This clause is designed to be used for the lease of an immovable (house, cottage, condominium, apartment) as a vacation resort. An immovable cannot be designated as a vacation resort in and of itself. It may constitute a vacation resort for one lessee and not for another, depending on the circumstances. It is the purpose of the premises and the use made of them by the parties that determine whether an immovable is leased as a vacation resort. The fact that the immovable is not the lessee's principal residence may be a factor in determining whether an immovable is being used as a vacation resort. The use of the premises as a vacation resort should always be specified in all contract documents (brokerage contract, promise to purchase, lease).
The condition of the premises should be established in writing by the parties when the lessee takes possession of the premises. This can be done using photographs (art. 1890 CCQ). The condition of the premises shall be established again by the parties at the end of the lease. Barring any repairs for which the lessee would be responsible, the security deposit can then be refunded to him by the trustee.
The clause is not to be used for a dwelling (house, cottage, condominium, apartment) that is not used as a vacation resort. The Civil Code states that the lessor of a dwelling cannot exact a deposit. He may only exact advance payment of the first month's rent (art. 1904 CCQ).
We remind you that the leasing of cottages, houses or apartments to tourists for a period not exceeding 31 days is governed by the Act respecting Tourist Accommodation Establishments, unless the property is leased only on an occasional basis. On this subject, please read the article entitled Abiding by the Act respecting Tourist Accommodation Establishments available on the OACIQ website. For more information on the requirements under the Act respecting Tourist Accommodation Establishments, please visit the Corporation de l'industrie touristique du Québec website (www.citq.qc.ca).
5.2 – Release and discharge
In consideration of the payment of ______ $ on this day by _________________ (payer) for __________________ (describe the reason of the payment), _____________ (payee) hereby releases and discharges the payer, as well as all of its officers, representatives, agents, employees or persons authorized to act on its behalf, from any and all claims of any nature that may be associated therewith, and waives all rights and remedies with respect thereto.
Note: This wording can be used if a broker or an agency is involved in any type of dispute and wishes to resolve it. Real estate agencies and brokers are not advised to use this clause to settle a dispute between clients (between the seller and the buyer, for instance). The use of this clause should be restricted to disputes to which they are parties, i.e. disputes opposing a broker or an agency and their client.
If the payer is a natural person, it is not necessary to add the phrase "as well as all of its officers, representatives, agents, employees or persons authorized to act on its behalf." However, it should be noted that if a broker resolves a dispute with a client or a third party without the agency’s intervention, he must require that the discharge also cover the agency on behalf of which he is authorized to act. In addition, in such a case the broker should make sure he is acting with his agency’s consent.
