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Transformation of the heating system, traps to be avoided

Transformation of the heating system, traps to be avoided

With the dazzling increase in the price of fuel oil, many landlords think of modifying their central heating system for a system with individual electric radiators. This strategy not only makes it possible to save on the annual heating expenses but also, like the great majority of landlords, to transfer responsibility for the cost of heating to the tenants.

This procedure comprises nevertheless some traps which should be known and well understood, since the owners cannot avoid them.

The procedure is divided into two distinct stages: modification of the lease and transformation of the system.

Usually, when the building is equipped with a central heating system, the leases of the building include, included in the price of the rent, the costs of heating. The heating thus becomes a service included in the lease. To withdraw this service to the tenant generates important consequences. The most important consequence of this modification is the important decrease in the price of the rent.

Indeed, to transfer the responsibility for the heating to the tenant, it is necessary to modify the lease during the time envisaged to this end. If the tenant refuses the modification, you will have to open a file at the Rental Board which will accept or refuse the requested modification of the lease and will determine the portion of the rent to decrease which the heating represents.

Thus, the heating can represent a considerable portion of the rent and the reduction in rent imposed by the Rental Board, can represent a part so significant that this transfer to the tenant could become dissuasive. One can even consider a reduction in rent by hundreds of dollars. The Rental Board bases itself primarily on the consumption of the previous year of the building. It is thus important to have an idea of the importance of this reduction before taking steps of modification of the lease in order to avoid disappointments.

In these circumstances, certain landlords transform the electric system of their building without modifying the lease and they continue to assume the additional heating one more year in order to obtain the real consumption of the electric system specific to this kind of housing. On the other hand, this situation requires a close cooperation between the parties involved. Indeed, the owners must refund to the tenant the heating part of their hydro bill. On its part, the tenant must consume in a reasonable way during this year. Although this situation has an unquestionable advantage for the determination of the reduction in rent, it remains complex to manage.

In all the cases, it would be advantageous to consult an expert to explain to you the importance of the reduction to envisage and determine if the process is worth the hassle. The agreement between the parties in this kind of procedure is always the best solution.

In regard to the alterations, it is the simplest part of the process. A 10 day notice to the tenant is enough to conform to the rules. Most of the time, this kind of work does not require an evacuation of the premise and can cause little damage. In the event of refusal of the tenant, the Rental Board will be able to emit the useful ordinances and establish the beacons of this work.

About the author

Me Jean-Olivier Reed, avocat

Me Jean-Olivier Reed graduated from Collège l'Assomption in legal technology in 1997 and then from the University of Montreal in law in 2001. Member of the bar since 2004, he was a lawyer and building manager from 2004 to 2006.

Lawyer with Messier Soucy lawyers since 2006. He works in real estate law and more particularly in rental law and co-ownership law.

He has written several articles in the newspaper "Le Propriétaire" on various topics dealing with rental law.
He lectures to members of the Quebec Landlords Association on current topics in rental law.

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