How to end a tenancy as a landlord, when you want to sell your home in B.C.
Please note: the information given in this article is not meant to be legal advice. It is also not intended to be a complete, legal document. You should verify all information in this article with your own research and by speaking with a legal representative. Links given in this article are only meant to indicate where we came to the understandings stated in this article.
When you rent out a property in Richmond, or elsewhere in B.C., being able to sell your home may come with a few extra steps to take. Usually, these are not impossible challenges to overcome. But they will require some planning with your real estate agent, your tenant and any potential buyers.
A tenant and landlord relationship is a serious one, with legal implications, in B.C. When you enter an agreement to rent out a unit that you own, certain laws protect both parties. You are not able to kick out your tenant without cause, or just because you feel like it. You also can not lie, or make up false, ‘legitimate’ excuses to kick out a tenant. And even if you get an unexpected, quick offer from a buyer, that is not always a reason for immediate eviction of the tenant living on your property. The new owner of a property is also not allowed to raise the rent suddenly, or evict a tenant that easily. Likewise, the tenant has to follow rules, like paying rent on time, or not causing a disturbance to other residents in the same building.
In all, the thing to know is that the B.C. tenancy rules are meant to be fair to all parties involved. They help to avoid situations of ulterior motives, or of one party holding too much sway over another. As a landlord, to avoid getting into trouble, or paying compensation, you’ll need to tread carefully when planning to evict tenants.
In this article, we’ll explain how to end a tenancy when you want to sell your home in B.C. We strongly recommend working with a real estate agent who knows these rules as well. You’ll see why, shortly.
When you intend to sell your property, give your tenant as much notice as possible
If you put your property for sale on the real estate market, while it is currently providing passive rental income for you, you may be tempted to wait until the last minute to ask your tenant to move out. You may be worried that your tenant will then rush to move out before your home sells, to secure their new living arrangement. And it’s hard to say how long your property will be on the market.
However, not giving early notice is a bad move. We’ll explain why:
You should must notify tenants of open houses, plus inividual home showings, and always respect their privacy
First of all, it will be hard to show your home for sale without the tenant knowing, since you’ll have to enter the property to do so. When you plan to show potential buyers the rental suite that is now for sale, you must give advance notice to the tenant. You have to get their permission to enter outside certain time frames, too. You must also allow the tenant to be home when entering the property, if they wish. And, if they are not home, you will be responsible for ensuring nothing happens to their stuff during these open houses or showings.
Traditionally, a real estate agent asks homeowners not to be present during open houses. This can affect the negotiations, or make potential buyers feel uncomfortable asking questions about the home, for fear of offending the homeowners. Real estate agents may also ask homeowners to stage a home, to make it more attractive to buyers.
However, in B.C., a real estate agent or landlord does not have the right to ask this of tenants renting the property. So, your best option here would be to stay on good terms with your tenant. See if they’d be open to leave the premises willingly, and schedule respectable time frames for open houses.
An experienced real estate agent will also be careful not to disturb the tenant for too many open houses in a row. Firstly, if this drags on, it’s not good for marketing a home anyways (it can make your home seem undesirable if unsold for too long). Secondly, it can put you on bad terms with the tenant, who can then exercise their legal right not to allow for showings except during specified times. This will, in turn, make it harder for you to sell quickly. There’s also the potential for putting you through dispute resolution processes with the Residential Tenancy Branch. These will be a headache, and bad use of your time. If the real estate agent caused this problem to begin with, it will not be their responsibility to solve it - it will be yours.
If the tenant is making it difficult to show the home for sale...
If the tenant is being uncooperative by not opening the door for legal showings, or by saying bad things about the property to potential buyers, you’ll have a course of action. However, you’ll have to wait a period of time before being able to resume the selling activities. Firstly, you’ll have to give the tenant one month’s notice to move out. Secondly, if the tenant disputes the issue, you may have to wait until a resolution with the Residential Tenancy Branch.
For these reasons, and more, we can’t stress enough that your real estate agent should be aware of tenancy laws before working to sell your income property. You don’t want to be in a situation where the real estate agent is causing trouble for tenants you’ve had a good relationship with, historically.
And, you’ll want to start putting written, legal agreements in place with your tenant before the house goes on the market, officially. So always tell your real estate agent if you have a tenant - especially a troublesome one - before hiring them.
You can’t kick out a tenant at the last minute because a buyer wants you to, nor to make the home sale more attractive
There is another huge issue with giving short-term eviction notices to tenants. By law, according to the Residential Tenancy Branch, there are limited reasons that a landlord can end a tenancy, when the renter has done nothing wrong, and there is nothing wrong with the unit. As long as they are paying rent on time, not being a disturbance and behaving as a good, law-abiding tenant overall, your options are as follows:
- You, or the new owner, can give the tenant 2 months notice to move because you, your father, mother or child (or that of your spouse) will move in. No other family members count.
- You, or the new owner, can give the tenant 4 months notice to move because you plan to renovate, demolish, or convert the unit into something else. In this case, the current tenant has the first right of refusal on entering into a new tenancy agreement, when the construction is complete, and must be given 45 days notice of the new suite’s availability.
- In both situations above, you must give the tenant the equivalent of 1 month’s rent, even if they move out earlier than the defined date in their notice.
Note: you MUST live up to the above claims for at least 6 months. They cannot be unreasonably delayed, and they cannot be lies or excuses. Being dishonest could result in having to pay 12 months rent to compensate the former tenant.
Also, the ‘two months’ or ‘four-month’ notice can sound misleading, because it has to occur before the rental payment due date. So if you give it on the 15th of the month, then the tenant can stay for two rental payment cycles, plus the 15 days left in the month you gave them the notice. You should read the links in this document for more information, as this rule gets a bit complicated under certain conditions.
There is another caveat: if the tenant and yourself have signed a lease, this lease cannot be broken early by either party. And if the lease has ended, this does not mean they can be kicked out sooner, or for other reasons than stated above. New tenancy laws in B.C. (since December 2017) seem to automatically turn lease terms into month-to-month rentals, with similar protections for tenants.T
he tenant can also dispute a notice within a certain time frame - even if you were following the law when doing so. If this happens, you’ll need to wait for these legal processes to take place before the tenant is forced to move out.
In extreme cases, if a tenant refuses to leave, a Supreme Court order and a bailiff may be required to force the tenant to leave (after other, initial steps). You should not change locks or get rid of the tenant’s property unless you have followed the right procedures - even if it seems like tenant has abandoned the unit.
As you can see, this makes your real estate agent’s job a sensitive matter. How they advertise your home for sale, by saying there is an existing tenant, needs to be done carefully. They should not make it seem like the suite for rent can be rented at a higher price once it is possessed by the new owner. They also can not promise the new owner that the suite will be empty, or that notice will be given as part of negotiations. And, if they hide the fact that you have a tenant from the buying party, that can put you in a bad spot. We’ll explain more on this below.
If the home is in foreclosure, the rental rules can change…
While this article is mainly for informing intentional home sellers, you should know that property in foreclosure can have different implications for tenants. See more here: http://tenants.bc.ca/foreclosure/
If you feel you are facing this issue, we would advise giving your tenants as much notice as possible, out of respect and honorable courtesy.
If you buy a rental income property with existing tenants, the former rental agreement still applies
As someone looking to buy a rental property for your own passive income, it can be tempting to want to evict tenants who have lived in the unit for several years, so that you can offset the costs of your current market-rate purchase price. Or, you may think you can raise the rent on them, since their old landlord is no longer in the picture. This is generally not allowed.
You will be bound to all the same terms that the tenant had signed with the former landlord. This means, for example, that if damage or pet deposits are due, and you did not discuss this with the former property owner, it will be your responsibility to pay it. It also means that you can not raise the rent beyond the current legal limits, based on the former tenancy agreement.
Again, the only way to enforce a tenant to leave is for the reasons listed above. So, in essence, you, or your “close” family members, will have to move in for at least 6 months (for real!), or renovate or demolish the place. And this requires sufficient notice to be given.
Your real estate agent should know all this, and be proactively advocating for you with the seller under these circumstances. These matters should be settled before the closing date of the sale, and explained to you in full, up front. You should not be caught off guard at the last minute. Remember, you will be responsible for these issues and costs, not your real estate agent. So, it’s important to pick one that is experienced in these situations.
B.C. tenancy laws are complex, and landlords should do their research before buying or selling income property
As you can see from the information given above, the tenancy laws in B.C. can be complex. In fact, we haven’t even covered all there is to know for landlords wishing to sell their rental property, or for buyers wanting to possess them. Your specific circumstance can also bring up new advice, which either a lawyer or the Residential Tenancy Branch can help you with.
The main thing to know is that when you work with a real estate agent to sell your income property, or to buy one, you should both be fully informed. You should have your ‘ducks in a row,’ and consider the tenancy as part of your sales strategy. How will the situation be presented to potential buyers? How can you stay within legal limits, while not putting yourself at a disadvantage when selling? And most of all, how can you be the most reasonable human possible to your tenant?
We encourage you bounce these types of questions off of your real estate agent. If they have worked to sell or buy a home in this position before, they may also be able to let you know how others have handled it.