Clause F Quebec Lease: The 5-Year New Building Rent Increase Exemption

If your Quebec rental building was built or converted to residential use within the last five years, you may be exempt from the TAL's rent-fixing formula. That exemption lives in Section F of the standard lease — and since Bill 31 in February 2024, getting it wrong can cost you the exemption entirely.

What Section F Does

Article 1955 of the Civil Code exempts three categories of dwellings from TAL rent-fixing:

• Buildings erected five years ago or less (counted from when the building was first ready for residential use)
• Buildings converted to residential rental use within the past five years
• Dwellings leased by a housing cooperative to its members

During this five-year window, neither landlord nor tenant can apply to the TAL to have the rent fixed or lease conditions modified. You set the rent by agreement — the regulatory formula doesn't apply.

But you can only claim this exemption if Section F of the official lease form says so.

Bill 31 Changed the Rules

Before February 21, 2024, Section F just needed to state that the dwelling was exempt. Since Bill 31, for any lease entered into on or after February 21, 2024, Section F must also disclose the maximum rent the landlord may charge during the five-year exemption period.

If you entered into a lease on or after February 21, 2024 and either:

• Left Section F blank, or
• Filled in the exemption but didn't state the maximum rent

…you've forfeited the exemption. The standard TAL rent-fixing rules apply, and if your tenant refuses a proposed increase, the TAL will adjudicate using the regulatory formula.

What Happens When a Tenant Refuses in an Exempt Unit

This is where Section F diverges sharply from the standard process.

In a normal (non-exempt) unit, a tenant who refuses a rent increase can stay and the landlord must either accept the old rent or file for TAL rent-fixing. The tenant has a statutory right to remain.

In a validly exempted Section F unit, the rules flip. If the tenant refuses the proposed modification, the tenant must vacate upon lease expiry. They cannot remain in the unit at the old rent, and the landlord cannot apply to the TAL to fix the rent (because the TAL has no jurisdiction over exempt units).

This makes proper Section F documentation critical. If you think you have an exemption but the paperwork is wrong, you're in the worst position: you can't use the exemption's stronger refusal rules, and you haven't prepared the documentation for a standard TAL filing.

Section G: Previous Rent Disclosure

Section G is a separate but related requirement. When signing a new tenant, you must disclose the lowest rent paid for the dwelling in the preceding 12 months (or the rent fixed by the TAL during that period).

Section G disclosure is mandatory for standard residential dwellings but exempt for dwellings falling under Article 1955, including qualifying new buildings and housing cooperatives. If the dwelling is not exempt under Article 1955, a missing disclosure gives the new tenant grounds to challenge their initial rent.

A new tenant who discovers that their rent was set above the previous lowest amount can apply to the TAL:

• Within 10 days of signing the lease (if Section G was filled in)
• Within 2 months of the lease start date (if Section G was omitted entirely)
• Within 2 months of discovering a misrepresentation (if Section G contained false information)

Knowingly providing false information in Section G can also expose you to punitive damages under Article 1896.

You Still Need to Serve Notice

Even with a valid Section F exemption, you must serve formal notice within the statutory window (3 to 6 months before expiry for a 12+ month lease). The exemption affects what happens after the tenant responds — not whether you need to notify.

A landlord who assumes that a new-building exemption means they can raise the rent informally, without the official TAL notice form and proper service, is setting up for a procedural failure.

The Quebec Rent Increase Guide covers both standard and Section F renewal workflows, including a checklist for verifying whether your exemption is valid under the post-Bill 31 rules.

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