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ARTICLE · 21 SEPTEMBER 2020

Real Estate Transactions: Exclusive Use Servitudes Deemed Invalid

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While exclusive use clauses remain common in leases, they can no longer be drafted in the form of servitude agreements in transactions.

CanadaReal Estate and Construction
Langlois Lawyers LLP
Langlois Lawyers LLP
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While exclusive use clauses remain common in leases, they can no longer be drafted in the form of servitude agreements in transactions.

In April 2020, in the case of Société immobilière Duguay Inc. v. 547264 Ontario Limited1, the Court of Appeal of Quebec ruled in favour of dismissing a Superior Court judgment2, thereby granting an application for declaratory judgment and striking off "exclusive use" clauses drafted in the form of servitude agreements restricting the types of business that could be carried out on a property. As a result, this case puts an end, in commercial transactions, to the use of servitude agreements to protect certain exclusive businesses or commercial uses from third parties in a given location.

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