As a landlord selling a tenanted property, there are things to consider to ensure that you are following the tenancy law. We’ve put together a few important points for you to remember when selling your property.
If you have a month to month tenancy:
The buyer and seller are required to give two months written notice to end the tenancy if the buyer intends to live in the property. A landlord must serve the two months notice so that it is received at least two months before the effective date of the notice and before the rent is due. For example, if the rent is due on the 1’st of each month, serving notice by March 30 would allow the buyer to move in on June 1. https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/ending-a-tenancy/landlord-notice/two-month-notice
Please note that a full four months notice is required if the tenancy is being terminated for demolition, renovation, repair or conversion by the buyer. https://www2.gov.bc.ca/assets/gov/housing-and-tenancy/residential-tenancies/forms/rtb29.pdf
If you have a fixed tenancy agreement:
If the tenancy is the form of a lease, the new buyers cannot move in until the lease expires or unless both parties mutually agree. Both the seller and the tenant would need to agree and complete a “Mutual Agreement to End Tenancy” form.
Are you obligated to pay the tenant any compensation?
As a landlord, you are required to the equivalent of one month's rent if you either serve a two or four-month notice to end the tenancy. After a tenant has received notice, they are still entitled to compensation even if they choose to leave at an earlier date. Alternatively, the tenant may opt to live the last month of the tenancy rent free.
The buyer can take over the tenancy:
The buyer can choose to take over the tenancy. The rent for the month of possession is typically adjusted between the buyer and the seller and the security deposit is typically credited to the buyer at completion.
What if the buyer wants to move into the property?
If the buyer would like to move into the home, the proper notice will need to be given to the tenant. The notice to vacate will need to coincide with possession dates.
What is the notice to tenants required for showings?
The landlord must provide 24 hr written notice to show the property. The tenant does not need to vacate during showings. However, if the tenant is providing false information about the property to a prospective buyer, Section 47 of the Residential Tenancy Act allows the landlord to issue a one-month eviction notice for cause for knowingly giving false information. Similarly, an uncooperative tenant may be issued a one month notice to end the tenancy. https://www2.gov.bc.ca/gov/content/housing-tenancy/residential-tenancies/ending-a-tenancy/landlord-notice/one-month-notice
As Realtors specializing in the marketing and sale of tenanted properties, we can work with your tenants to ensure a smooth sale process.
We communicate with your tenant before the property is active on MLS. It’s vital to establish positive communication with your tenant. The more we work with them, the more helpful they will be. If you are thinking about selling in the near future, don’t enter into a new lease with the tenant. Wait for the lease to expire and move into a month to month tenancy. Potential buyers may need a quick possession. A long completion may have an impact on your sales price. Ensure that you increase your rent accordingly each year and (of course) Be aware of your rights.
If you’re thinking about selling your rental property, please call us for a valuation.