It can be difficult to differentiate whether a purchase made at a hardware store is considered a major expense or rather a maintenance expenditure.
On the other hand, a major expense is an expenditure that is not part of the regular operating costs, which aims to improve and/or repair important elements of the building such as the roof, structural elements, water heaters or kitchen cabinets. It also includes the costs of setting up new facilities, such as the installation of cameras.
In a recent judgement,(1) the Special Clerk considered the question: Is it a maintenance expense or major work?
For context, the landlords have submitted a rent-setting file for the renewal of a lease on July 1, 2023 at a cost of $833 including the parking space. The landlords provide the Mandatory Information Form (NW) and supporting invoices to support their request.
The landlords carried out work that required the purchase of materials and a bill of $2563.48 which represents “ranging from the installation of silicone around the bathroom washrooms, the adjustment of the main entrance door, the repair of a balcony door, the addition of foam around a drain pipe, etc.” For the landlords these are major works because they improve the building.
The Clerk recalled the important definitions and distinctions of each category:
7 The purpose of maintenance expenses is to maintain the value of the building or its accessories in good condition (2).
10 In short, these costs are for the restoration of what is deteriorated. This will involve correcting defective elements, replacing them or restoring them. The term “major”, on the other hand, refers to what is important, considerable, substantial or significant (3).
11 Major repairs and improvements result in costs that are not part of the building's regular operating expenses.
12 This may include work to repair or modify the main structural elements of the building or major renovation work in the dwellings or common areas (4). This work usually adds value and can be a capital investment.
In this case, the work is mainly work on the doors and aims to maintain the building for a restoration, so this expense will be considered as maintenance and put in the Maintenance costs” section.
The landlords are also asking for 43 hours of work at a cost of $20/hour for the maintenance of the building by themselves. Section 1 of the Regulation respecting the criteria for setting rent provides that the labour and work performed by the landlord may be taken into account when it comes to maintaining the building. The rate of $20/hour being reasonable according to the Court, these 43 hours are added to the rent-adjustment calculation.
After calculation, the rent adjustment allowed under the Regulation respecting the criteria for setting rent is $58.59 per month.
Finally, the rent is set at $892.00 on July 1, 2023 and the landlords must assume the costs of the request because they have not submitted evidence justifying the order to the tenants to assume these costs.
As each case is specific, do not hesitate to contact our legal team with your questions.
(1) Anania c. De Medeiros 2024 QCTAL 24662
(2) Terrasses Greenfield Canada Inc. c. Martel-Harvey, R.L. révision, 37-880419-041V-890321, 8 janvier 1990, rr. Joly et Bernard (J.L. 90-32)
(3) 9120-6003 Québec Inc. c. Paradis, 2014 CanLII 130981 (QC RDL)
(4) Abastado c. Société d'Habitation et de Développement de Montréal, 2011 CanLII 108066 (QC RDL)