Letourneau c. Le Richelieu decision on lease guarantors and renewals in Quebec

A lease guarantor can be a strong layer of protection for a landlord, especially when rent goes unpaid. The guarantor agrees to step in and perform the tenant’s obligations if the tenant does not.

The Quebec Court decision Letourneau v Le Richelieu from 2018 is a helpful reminder about what happens when a lease is renewed. A guarantor does not automatically stay on the hook forever, and landlords should take their information and disclosure duties seriously.
Source http://canlii.ca/t/htp46

Quick refresher on what a guarantor is in Quebec law

In Quebec civil law, suretyship is not presumed. It must be express, meaning the guarantor must clearly agree to the commitment.
Source https://www.legisquebec.gouv.qc.ca/en/version/cs/CCQ-1991?code=se%3A2335

There is also a specific leasing rule that matters a lot. A security given by a third person to guarantee the tenant’s obligations does not extend automatically to a renewed lease.
Source https://www.legisquebec.gouv.qc.ca/en/version/cs/CCQ-1991?code=se%3A1881

So if a landlord assumes the original guarantor automatically covers future renewals, that assumption can be risky.

The duty to inform the guarantor and the role of good faith

Quebec law also includes an information duty toward the guarantor. On request, the creditor must provide useful information on the main obligation and on the state of its performance.
Source https://www.legisquebec.gouv.qc.ca/en/version/cs/ccq-1991?code=se%3A2345

More broadly, the parties must conduct themselves in good faith when the obligation arises, while it is performed, and when it ends.
Source https://www.legisquebec.gouv.qc.ca/fr/version/lc/%20CCQ-1991?code=se%3A1375&historique=20240226

In a lease renewal context, these principles can support the idea that landlords should be transparent with guarantors and should not treat renewals as invisible extensions of risk without clear communication and consent.

What Letourneau v Le Richelieu helps landlords understand

The practical lesson is straightforward.

The question is not only whether a guarantor signed at the beginning. The question is whether the guarantor is still legally bound after the lease is renewed. This decision discusses the importance of disclosure and good faith toward the guarantor when the lease is renewed.

If the landlord does not take steps to ensure the guarantor is informed and validly committed for the renewed period, there is a real possibility that the guarantor will be released for the renewed lease term.
Source http://canlii.ca/t/htp46
Source https://www.legisquebec.gouv.qc.ca/en/version/cs/CCQ-1991?code=se%3A1881

TAL decision summaries also show situations where guarantors were not held responsible because the lease did not clearly extend the guarantor’s commitment beyond the initial term.
Source https://www.tal.gouv.qc.ca/fr/resume-conditions-du-bail

Best practice steps that reduce risk

Use a clear written guarantor document that is express and specific
Make the scope of the guarantee easy to understand and not vague
When the lease renews, inform the guarantor and get clear consent if you want continued coverage
Keep written proof such as emails, letters, and signed acknowledgements
Operate consistently with good faith and transparency

Closing thought

Letourneau v Le Richelieu is a useful reminder.

A guarantor can be excellent protection, but only when the commitment is express and managed properly at renewal time. Otherwise, you may find out too late that the guarantee does not cover the renewed period.
Source http://canlii.ca/t/htp46
Source https://www.legisquebec.gouv.qc.ca/en/version/cs/CCQ-1991?code=se%3A1881

This text is general information, not legal advice.