Virtually every lease contains a quiet enjoyment clause and despite the name, it has little to do with decibel levels. Rather it is a promise by a landlord to allow a tenant to use a space for the purpose for which it was leased and to not substantially interfere with that use. What amounts to substantial interference? Erecting a brick wall outside the front door? Yes. Removing all of the doors and windows? Yes. A premises with unpleasant odours? Perhaps. Cockroaches? Maybe.
In Nanaimo, B.C. a clothing store tenant began noticing an unpleasant odour not long after moving in. The smell got worse over the course of several months and the tenant became concerned that the odour would damage the inventory, not to mention discourage customers from entering the store. The landlord consistently denied the existence of a problem and general repairs did not resolve the issue. Eventually, the tenant stopped paying rent and found an alternate location. The landlord sued but lost. The court held that the presence of "a strong and unpleasant odour" defeated the purpose of leasing the space by discouraging customers and ruining the products. This amounted to a "fundamental breach" which entitled the tenant to repudiate the lease. A fundamental breach occurs where one party is deprived of essentially the whole benefit of the lease as a result of a breach by the other party. There are no hard and fast rules as to what qualifies – the facts of each situation have to be assessed by a court to determine if the breach is sufficiently serious. Where such a breach is established, the innocent party has the right to treat the lease as at an end.
On the other side of the country, a Montreal optical store was alarmed to discover a cockroach infestation shortly after moving in. The landlord did multiple treatments to eradicate the problem but to no avail. After nearly two years and no signs of improvement, the tenant informed the landlord that the problem was intolerable and sought to cancel the lease. In Quebec establishing a breach of the covenant of quiet enjoyment or "peaceful enjoyment", as it is referred to in the Quebec Civil Code, is more formalized than showing substantial interference. In Quebec a landlord is required to provide peaceful enjoyment of a premises to its tenant for the term of the lease. Establishing a breach of this obligation requires showing that the tenant notified the landlord of the problem and that once notified, the landlord failed to substantially perform its obligations under the Quebec Civil Code. Where a landlord's action or inaction is sufficiently serious to constitute serious prejudice in the eyes of a court, a tenant may be entitled to cancel its lease.
As in BC, the Quebec court sided with the tenant. The landlord knew the extent of the problem and failed to fully comply with the exterminators' recommendation to clean the entire building, not just the problem areas. This amounted to a failure by the landlord to live up to its requirement under the Quebec Civil Code to deliver the property in a good state of repair fit for the purpose for which it was leased. In the court's view the infestation amounted to prejudice so serious as to entitle the tenant to cancel the lease.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
