Sometimes the owner of an immovable may wish to develop the property, but may not be willing to handle such development. On the other hand, a developer may want to develop a site, but may not be able to purchase it. In both cases, given the costs associated with real estate development, such development may require many years before the initial investment is recovered. One option for such a project would be an emphyteutic lease governed by the Civil Code of Quebec. This template sets out the legal framework for an emphyteutic lease.

To learn more about the fundamental aspects of a emphyteutic lease, please refer to document E06005 of our Business Documents collection.

The emphyteutic lease is a system of hybrid ownership over time, involving the alternance of active and passive rights. The lease is often used to allow the development of federal or provincial Crown Lands, which must remain in the public domain but which may be used in a way that adds value to such land (parks, seaports, etc.). In addition, this type of contract may also be used in various situations involving the private domain in which the same economic and legal issues arise.

0.00 INTERPRETATION
0.01 Definitions
0.01.01 Activities
0.01.02 Agreement
0.01.03 BARE OWNER
0.01.04 Best Efforts
0.01.05 Breach
0.01.06 Change in Control
0.01.07 Common Areas
0.01.08 Confidential Information
0.01.09 Emphyteusis
0.01.10 Encumber or Encumbrance
0.01.11 Event of Default
0.01.12 Force Majeure
0.01.13 Full Term
0.01.14 Fundamental Provisions
0.01.15 Hazardous Materials
0.01.16 Immovable
0.01.17 Improvements
0.01.18 Initial Term
0.01.19 Insurance
0.01.20 Intellectual Property
0.01.21 Land Taxes
a) Definition
b) Exception
c) Owed Amounts and Payment
0.01.22 Law
0.01.23 Legal Representatives
0.01.24 Offer
0.01.25 Operating Expenses
a) Inclusions
i) Cost of Repairs
ii) Cost of Services
iii) Administrative Expenses
b) Exclusions
0.01.26 PARTY
0.01.27 Person
0.01.28 Prime Rate
0.01.29 Real Estate Complex
0.01.30 Related Person
0.01.31 Rent
0.01.32 Subsidiary
0.01.33 Surface Area of the Immovable
0.01.34 Total Destruction
0.01.35 Total Surface Area
0.02 Precedence
0.03 Application and Subordination
0.04 Jurisdiction
0.04.01 Governing Law
0.04.02 Non-Compliance
a) Severability
b) Substitute Provision
0.05 Miscellaneous
0.05.01 Cumulative Rights
0.05.02 Dates and Time
a) Time of the Essence
b) Computation of Time
c) Delays
0.05.03 Financial References
0.05.04 Cross-References
0.05.05 Gender and Number
0.05.06 Headings
0.05.07 Presumptions
0.05.08 Knowledge
0.05.09 Approval
0.05.10 Accounting Standards
1.00 CONSTITUTION OF EMPHYTEUSIS
2.00 CONSIDERATION
2.01 Improvements
2.02 Base Rent
2.03 Additional Rent
2.04 Percentage Rent
2.05 Renewal
3.00 TERMS OF PAYMENT
3.01 Base Rent
3.01.01 Deposit
3.01.02 Monthly Payments
3.02 Additional Rent
3.02.01 Estimate
3.02.02 Adjustment
3.02.03 Certificate
3.03 Percentage Rent
3.03.01 Monthly Statement of Gross Revenue
a) Delivery
b) Surplus to BARE OWNER
c) Calculation
3.03.02 Annual Statement of Gross Revenue
a) Delivery
b) Surplus to BARE OWNER
c) Refund to EMPHYTEUTIC LESSEE
3.03.03 Books and Registers
a) Calculating Percentage Rent
b) Retaining Registers
c) Record
3.03.04 Right to Examine
a) Scope
b) Procedure
c) Inadequate Books and Registers
d) Default of EMPHYTEUTIC LESSEE
e) Indemnification
3.03.05 Failure to Remit Statement of Gross Revenue
3.04 Arrears
3.05 Place of Payment
3.06 Allocation
3.07 Waiver of Compensation
3.08 Postdated Cheques
3.09 Disbursements
4.00 SECURITY
4.01 Suretyship
4.01.01 Undertaking
4.01.02 Solidarily
4.01.03 Waiver
4.01.04 Presumption
4.01.05 Scope
4.01.06 Jurisdiction
4.02 Movable Hypothec without Delivery
4.03 Irrevocable Letter of Credit
5.00 MUTUAL REPRESENTATIONS AND WARRANTIES
5.01 Status
5.02 Authority
5.03 Binding Agreement
5.04 Canadian Resident
5.05 Commission
5.06 Insurance
5.07 Nominee
5.08 Fundamental Provisions
5.09 Disclosure
5.10 Legal Proceedings
5.11 Declaration of Intent
5.12 Other Promises or Declarations
6.00 REPRESENTATIONS AND WARRANTIES OF BARE OWNER
6.01 Status
6.02 Authority
6.03 Binding Agreement
6.04 Canadian Resident
6.05 Commission
6.06 Insurance
6.07 Nominee
6.08 Fundamental Provisions
6.09 Disclosure
6.10 Legal Proceedings
6.11 Knowledge
6.12 Delivery
6.13 Environment
7.00 REPRESENTATIONS AND WARRANTIES OF EMPHYTEUTIC LESSEE
7.01 Status
7.02 Authority
7.03 Binding Agreement
7.04 Canadian Resident
7.05 Commission
7.06 Insurance
7.07 Nominee
7.08 Fundamental Provisions
7.09 Disclosure
7.10 Legal Proceedings
7.11 Condition of Immovable
8.00 MUTUAL DUTIES AND OBLIGATIONS
8.01 Confidential Information
8.01.01 Undertaking
8.01.02 End of Agreement
8.02 Indemnification
8.02.01 “Loss”
8.02.02 Scope
8.02.03 Procedure
8.02.04 Deductible
8.02.05 Limitation on Claims
8.03 Disclosure of Agreement
9.00 DUTIES AND OBLIGATIONS OF BARE OWNER
9.01 Quiet Enjoyment
9.02 Services
9.03 Preliminary Work
9.04 Statement of Operating Expenses
10.00 DUTIES AND OBLIGATIONS OF EMPHYTEUTIC LESSEE
10.01 Improvements
10.01.01 Undertaking
10.01.02 Prior Consent Required
10.01.03 Compliance
10.01.04 Supervision
10.01.05 Insurance
10.01.06 Execution of the Disbursements
10.01.07 Schedule
10.01.08 Partial Destruction
a) Rebuilding
b) Appraisal
c) Arbitration
10.01.09 Supervision of Work
10.01.10 End of Emphyteusis
10.02 Insurance
10.02.01 Property Damage and Civil Liability
a) Scope
b) Terms
c) Premiums
10.02.02 Sums in Deposit
10.02.03 Total Destruction
10.02.04 Terms
a) Reconstruction
b) Authorizing Payment
c) Insufficient Resources
d) Progress Report
e) New Insurance Policies
10.02.05 Insurance Policies
a) Duly Authorized Insurer
b) Approval of BARE OWNER
c) Notice of Change or Cancellation
d) Default
10.02.06 Increased Risks
a) Flammable or Explosive Materials
b) Additional Premiums
10.02.07 Copies of Insurance Policies
10.03 Taxes
10.03.01 Liability
a) Scope
b) Subrogation
10.03.02 Proof of Payment
10.03.03 Opposition or Contestation
a) Terms
b) Conditions
c) Preventative Measures
d) Surplus or Deficit
10.03.04 Adjustments
10.03.05 Land Taxes on Improvements
a) Scope
b) Determination of Portion
c) Information
d) Payment
e) Deduction
10.04 Visiting of the Premises
10.04.01 Right of EMPHYTEUTIC LESSEE
10.04.02 Right of BARE OWNER
10.05 Heating
10.05.01 Maintenance of the System
10.05.02 Maintaining Adequate Temperature
10.06 Maintenance
10.06.01 Scope of Undertaking
10.06.02 Notice
10.07 Cleaning and Cleanliness
10.08 Fire Prevention
10.09 Use of Immovable
10.09.01 Purpose
10.09.02 Restrictions
10.09.03 Permitted Activities
10.10 Compliance
10.11 Assignment and Sublease
10.11.01 Prior Consent Required
10.11.02 Waiver
10.11.03 Novation
10.11.04 Fees
10.11.05 Reserve
10.11.06 Conditions of Consent
10.11.07 BARE OWNER's Options
10.12 Advertisement
10.13 Change in Control
10.13.01 Notice
10.13.02 Transfer or Disposition of Securities
10.14 Sale of Business
10.15 Additional Alterations
10.15.01 Return to Prior Condition
10.15.02 Indemnity
10.16 Legal Hypothecs and All Encumbrances
10.16.01 Prohibition
10.16.02 Payment of Constructions, Works and Plantations
10.16.03 Act or Omission
10.17 Prohibitions
10.17.01 Roof
10.17.02 Outside Work
10.17.03 Liability
10.18 Fees for Preparing the Agreement
10.18.01 Scope
10.18.02 No Revision or Negotiation
10.18.03 Negotiation by Legal Counsel
10.19 Waiver of BARE OWNER's Liability
10.19.01 Discharge
10.19.02 Inspection or Emergency
10.20 Major Repairs
10.21 Deterioration and Excavation
10.21.01 Notice
10.21.02 Work Adjacent to Immovable
10.22 Surrender of Immovable
10.23 Excess Load
10.24 Walls
10.25 Delivery of Immovable
10.25.01 Condition
10.25.02 Removal of Property
10.26 Internal Rules
10.26.01 Rights of BARE OWNER
10.26.02 Undertaking of EMPHYTEUTIC LESSEE
10.26.03 Duration of Internal Rules
10.27 Injunction
10.28 Penalty Clause
10.29 Proof of Performance
10.30 Execution by BARE OWNER
10.30.01 Default by EMPHYTEUTIC LESSEE
10.30.02 Payment by the BARE OWNER
10.30.03 Reimbursement
10.31 Commercial Equipment and Accessories of EMPHYTEUTIC LESSEE
10.32 Installation and Use of Signs
10.32.01 Prior Consent
10.32.02 Procedure
10.32.03 Ownership
10.33 Merchandise Placed in the Real Estate Complex
10.34 Common Areas
10.35 Parking Areas
10.35.01 Rules
10.35.02 Removal
10.35.03 Modifications
10.35.04 Non-Liability of BARE OWNER
10.35.05 Right to Rent
10.35.06 Parking Rates or Fees
10.36 Fitting the Immovable
11.00 SPECIAL PROVISIONS
11.01 Force Majeure
11.01.01 No Default
11.01.02 Duty
11.01.03 Rights of Other PARTY
11.02 Relationship
11.02.01 Independent Contractors
11.02.02 No Control Over Performance
11.02.03 No Authority to Bind
11.03 Further Assurances
11.04 Other Remedies
11.04.01 Election
11.04.02 No Limitations
11.05 Prescriptive Period
11.06 Pre-Incorporation Agreement
11.07 Hypothec and Transfer by BARE OWNER
11.07.01 Sale or Financing
11.07.02 Declaration of EMPHYTEUTIC LESSEE
11.07.03 Publication in Priority of a Right
11.07.04 Execution of Deeds or Certificates
11.07.05 Assignment by BARE OWNER
11.08 Registration
11.08.01 Copy
11.08.02 Cancellation
11.08.03 Default
12.00 GENERAL PROVISIONS
12.01 Notice
12.02 Dispute Resolution
12.02.01 Good Faith Negotiations
12.02.02 Mediation
12.02.03 Arbitration
a) Notice
b) Reply
c) Appointment of a Third Arbitrator
d) Subcontracts
e) Confidentiality
f) Hearing
g) Ruling
h) Costs
i) Supplementary Rules
12.03 Election
12.04 Counterparts
12.05 Amendment
12.06 No Waiver of Rights
12.07 Electronic Transmission
12.08 Language
13.00 TERMINATION
13.01 Without Notice
13.02 With Notice
13.02.01 On Thirty Days’ Notice
13.03 Expropriation
13.03.01 Total
13.03.02 Partial
a) Repairs or Alterations
b) Amount
c) End of Agreement
13.03.03 Indemnity
13.03.04 Rent Payment
13.04 Damage or Partial Destruction of Immovable
13.04.01 Repairs
13.04.02 Rent Reduction
13.04.03 Conditions
13.04.04 Vacate Immovable
13.04.05 Continued Effect of Agreement
13.04.06 Repairs
13.04.07 Trust
13.04.08 Limitation
14.00 EFFECTIVE DATE
15.00 DURATION
15.01 Initial Term
15.02 Early Occupancy
15.03 Renewal
15.03.01 First Renewal
15.03.02 Subsequent Renewals
15.04 Extended Occupancy
15.05 Delayed Occupancy
15.06 Non-Renewal
16.00 SCOPE


SCHEDULE A – EXCERPT OF A RESOLUTION OF BARE OWNER
SCHEDULE B – EXCERPT OF A RESOLUTION OF EMPHYTEUTIC LESSEE
SCHEDULE 0.01.16 – IMMOVABLE
SCHEDULE 0.01.17 – IMPROVEMENTS
SCHEDULE 4.01 – INTERVENTION OF SURETY
SCHEDULE 4.01.01 – INTERVENTION OF SURETY
SCHEDULE 4.02 – MOVABLE HYPOTHEC WITHOUT DELIVERY
SCHEDULE 4.03 – IRREVOCABLE LETTER OF CREDIT
SCHEDULE 9.03 – PRELIMINARY WORK TO BE EXECUTED BY BARE OWNER
SCHEDULE 10.26.03 – INTERNAL RULES OF REAL ESTATE COMPLEX / IMMOVABLE
SCHEDULE 11.07.02 – DECLARATION BY EMPHYTEUTIC LESSEE
SCHEDULE 11.08.01 A – REGISTRATION REQUEST
SCHEDULE 11.08.01 B – DECLARATION OF CERTIFICATION