GENERAL TERMS AND CONDITIONS OF SURETYSHIP OF A RESIDENTIAL LEASE

GENERAL TERMS AND CONDITIONS OF SURETYSHIP OF A RESIDENTIAL LEASE

Effective October 25, 2019

The general terms and conditions herein govern the rights and obligations of LOCNEST HOLDINGS INC. (“LOCNEST”) with respect to its obligations as a surety of the obligations of the Lessee under the lease between the Lessee and the Lessor for the leased dwelling described on the back (the “Lease”) of this suretyship certificate (this “Certificate”).

Article 1. Suretyship: LOCNEST hereby agrees to guarantee to the Lessor the payment and performance when due of all the covenants, obligations, and responsibilities of the Lessee pursuant to the Lease (the “Obligations”), within the limits and subject to conditions set forth herein, and up to the amount in principal, fees and interest, of the amount specified on the back (the “Suretyship Amount”) of this Certificate (the “Suretyship”).  

Multiple Certificates may be issued in connection with the same Lease, provided that the name of each Lessee to whom the Certificate is issued appears on the Lease. In the event that one Lessee has been issued multiple Certificates with respect to the same Lease, only the most recently issued and delivered Certificate will be valid.

Article 2. Exclusions: The obligations of LOCNEST under the Suretyship do not apply or are limited, as applicable, in the following cases: 

a) LOCNEST guarantees the performance only of the Obligations created between the Start Date of the Suretyship and the end date of the Suretyship;

b) in the event that LOCNEST pays an amount to the Lessor pursuant to the Suretyship, the Suretyship Amount will be reduced by the amount paid; 

c) In the event of a sublease, LOCNEST does not guarantee the performance of the sub-lessee’s obligations to the Lessee, nor the Lessee’s obligations to the sub-lessee resulting from the sublease. For the sake of clarity, the Lessee’s Obligations under the Lease shall continue to be guaranteed by the Suretyship during the term of the sublease until the end of the term of the Suretyship, as defined in Article 5.

d) if the Lease does not provide that the responsibility of all of the lessees and/or co-signers is, in Quebec, solidary and, in the rest of Canada, joint and several, this Certificate will be null and void and LOCNEST will not have any obligation toward the Lessor pursuant to this Certificate or otherwise; and

e) if the Lease is not in respect of a residential dwelling or if the Lease relates to a residential dwelling that is not situated in Quebec, Ontario, British Columbia, or Alberta, this Certificate will be null and void and LOCNEST will not have any obligation toward the Lessor pursuant to this Certificate or otherwise. 

Article 3. Payment of the Suretyship:  The Lessor will be entitled to make a demand for payment by LOCNEST under this Suretyship following a default by the Lessee of the performance of its Obligations under the Lease when due and payable upon the presentation by the Lessor of this Certificate, the signed Lease agreement and of one of the following documents:

a) an acknowledgement by the Lessor and the Lessee (or the Lessee’s representative) of the Lease default, including the amount owing under the Lease, submitted by the Lessee and the Lessor electronically through the website of LOCNEST;

b) an enforceable judgment, not appealed, regarding the claims of the Lessor against the Lessee in relation to the Lease;

c) an enforceable judgment, not appealed, declaring that the Lessee is bankrupt;

d) an enforceable judgment, not appealed, effecting a proposal filed by the Lessee pursuant to the Bankruptcy and Insolvency Act (the “Proposal”), provided that any amount payable to the Lessor pursuant to the Proposal will be deducted from any amounts to be paid by LOCNEST to the Lessor pursuant to this Suretyship; or

e) a notice of the assignment or petitioning in bankruptcy of the Lessee, issued by a licensed insolvency trustee under the Bankruptcy and Insolvency Act.

 

The Lessor is required to inform LOCNEST in writing of any fact or circumstance that could affect LOCNEST’s obligations under the Suretyship within thirty (30) days of becoming aware of such fact or circumstance. Any failure to provide such notice could result in the forfeiture of the Lessor’s rights under the Suretyship. Notwithstanding the foregoing, when the Lessor demonstrates to LOCNEST’s satisfaction that it was not possible for Lessor to have given such notice within such 30 day time period, LOCNEST shall continue to honour its obligations to make payment under the Suretyship in accordance with the terms and conditions hereof. provided that the Lessor sends the information to LOCNEST within the year of the occurrence of the facts or circumstances originating the claim.

LOCNEST acknowledges and agrees that, except as otherwise expressly provided otherwise herein, the Obligations are continuing, absolute and unconditional and, without limiting the generality of the foregoing, LOCNEST’s obligations under the Suretyship shall not be released, discharged, diminished, limited or otherwise affected by (and LOCNEST hereby consents to or waives, as applicable, to the fullest extent permitted by applicable law): (i) any lack or limitation of power, incapacity or disability on the part of Lessee or the Lessor, (ii) the insolvency, bankruptcy, reorganization, winding-up or financial condition of any of LOCNEST, the Lessor or the Lessee at any time;  (iii) any defence based upon or arising out of any bankruptcy, insolvency, reorganization, moratorium, arrangement, liquidation, dissolution or other proceeding commenced by any of LOCNEST, the Lessee or the Lessor or any other person; (iv) any loss or impairment of any right of LOCNEST to subrogation, reimbursement or contribution; (v) any other irregularity, defect or informality, on the part of the Lessee or the Lessor with respect to any or all of the Obligations; (vi) any fraud on the part of the Lessee with respect to any or all of the Obligations; (vii) any other act or omission of any kind by LOCNEST, whether similar or dissimilar to the foregoing, which would, but for the provisions of this Section constitute a legal or equitable discharge, limitation or reduction of the LOCNEST’s obligations under the Suretyship (other than performance in full of the Obligations). 

Article 4. The Term of the Suretyship: The Suretyship takes effect on the start date indicated on the Certificate, or on the date of commencement of the term of the Lease, whichever occurs last (the “Start Date”). The Suretyship ends at the earliest of one of the following events:

a) the consent of the Lessee, the Lessor and LOCNEST;

b) payment by LOCNEST to the Lessor of an amount pursuant to the Suretyship up to the Suretyship Amount;

c) a termination or a non-renewal of the Lease;

d) an assignment of the Lease by the Lessee;

e) a change of use of the leased premises for any non-residential purpose.

In the event of a voluntary or forced transfer of the building containing the leased dwelling, this Suretyship will benefit the new Lessor, provided that LOCNEST is notified in writing of the transfer of ownership of the building within thirty (30) days of the transfer.

Article 5. Right of Recourse and Subrogation, Co-Lessees, and Co-signers:  Should LOCNEST pay the Lessor any amount pursuant to this Suretyship, LOCNEST is subrogated to the rights of the Lessor and is authorized to pursue remedies against the Lessee for all amounts paid by LOCNEST to the Lessor until fully paid. Interest, at the rate of 12% per year calculated daily and compounded monthly, will be charged to the Lessee on any outstanding amounts paid under the Suretyship until repaid by the Lessee. The Lessee undertakes to reimburse LOCNEST for all reasonable costs incurred in collecting any amounts that remain unpaid, including legal fees.  

Article 6. Obligations of the Lessee: If the Lease ends or if the Lessee leaves the leased dwelling, the Lessee is required to so inform LOCNEST as soon as possible but no later than within thirty (30) days.  The Lessee is also required to inform LOCNEST without delay if the Lessor makes any claims against the Lessee pursuant to the Lease, whether during the Lease or afterwards.

Article 7. LOCNEST’S RESPONSIBILITY:  TO THE EXTENT PERMITTED BY LAW, LOCNEST, ITS AFFILIATES AND ITS AND THEIR RESPECTIVE OFFICERS, SHAREHOLDERS, EMPLOYEES, AGENTS, DIRECTORS,  SUCCESSORS, ASSIGNS, AND SUPPLIERS SHALL NOT BE HELD LIABLE IN ANY CASE, FOR ANY INDIRECT, SPECIAL, ACCESSORY, PUNITIVE, EXEMPLARY OR CONSECUTIVE DAMAGES, INCLUDING, WITHOUT LIMITING THE GENERALITY OF THE FOREGOING, THE LOSS OF PROFIT OR INCOME, THE LOSS OF THE ENJOYMENT OF PROPERTY OR OF ANY RELATED PRODUCT, THE COST OF CAPITAL, THE COST OF REPLACEMENT PRODUCTS, FACILITIES OR SERVICES, THE COST OF DOWNTIME, OR THE CLAIMS BY THE LESSOR, THE LESSEE OR THIRD PARTY FOR SUCH DAMAGES, REGARDLESS OF WHETHER THE LIABILITY IS BASED ON CIVIL LIABILITY (CONTRACTUAL OR EXTRACONTRACTUAL), A GUARANTEE, A TORT (INCLUDING NEGLIGENCE) OR ANY OTHER LEGAL BASIS. THE AGGREGATE LIABILITY OF LOCNEST, ITS AFFILIATES AND ITS AND THEIR RESPECTIVE OFFICERS, SHAREHOLDERS, EMPLOYEES, AGENTS, DIRECTORS,  SUCCESSORS, ASSIGNS AND SUPPLIERS FOR ALL CLAIMS WITH RESPECT TO YOUR SURETYSHIP CANNOT EXCEED THE SURETYSHIP AMOUNT, TO THE LARGEST EXTENT PERMITTED BY LAW.

Article 8. Notices: Any communication and any notification from LOCNEST to the Lessee and to the Lessor relating to this Suretyship shall be validly sent electronically, including through the automated technological procedures accessible on LOCNEST’s website, to the email address indicated on the Certificate or to any new email address provided in writing by the Lessee or by the Lessor or its representative.

Article 9. Amendments: 

LOCNEST reserves the right to modify at any time the present general terms and conditions of suretyship of a residential lease. This amendment will only apply to new Certificates. The present Certificate remains subject to the general terms and conditions of suretyship of a residential lease in effect at the time of its delivery.

Article 10. Applicable Law and Choice of Forum: This Suretyship, these Terms and Conditions and the Certificate shall be governed by the applicable laws of the province where the leased dwelling that is the subject of the Lease is located and the laws of Canada, applicable therein,  without regard to conflict of laws principles that would provide for the application of the law of any other territory. The Lessor, the Lessee, and LOCNEST agree to attorn to the jurisdiction of the following courts, as applicable:

a) if the leased dwelling is located in Quebec, the courts of the district of Montreal;

b) if the leased dwelling is located in Ontario, the courts sitting in the City of Ottawa;

c) if the leased dwelling is located in Alberta, the courts of the district of Calgary; and

d) if the leased dwelling is located in British Columbia, the courts sitting in the City of Vancouver.

Article 11. Miscellaneous: Should any provision of this agreement be declared invalid, void or otherwise unenforceable for any reason whatsoever, such provision shall be automatically severed and no longer form part of this agreement, and the application and validity of other provisions hereof shall not be thereby affected. LOCNSET may assign in whole or in part its rights resulting from this Suretyship, these Terms and Conditions or the Certificate at any time and without the consent of the Lessee or of the Lessor.

Article 12. Language of Agreement: The parties confirm that it is their wish that this agreement, as well as any other documents relating to this agreement, including notices, schedules and authorizations, have been and shall be drawn up in the English language only.  Les signataires confirment leur volonté que la présente convention, de même que tous les documents s’y rattachant, y compris tout avis, annexe et autorisation, soient rédigés en anglais seulement.