Selling Your Tenanted Property in BC
What You Need to Know
Written By: Mariko Baerg, REALTOR of Bridgewell Real Estate Group
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If you’ve thought about selling your tenanted property, there is a lot to keep track of to ensure that you are following tenancy law.
This blog goes through frequently asked questions regarding selling your tenanted property.
We answer important information like how much notice you need to give, compensation to the tenant, and more.
Read on for everything you need to know about selling your tenanted property in BC!
Rules regarding notice to end tenancy if you have a MONTH TO MONTH TENANCY:
The buyer and seller are required to give Two months notice to end tenancy if month to month tenancy and the buyer plans to live in the property. Written notice is required. A landlord must serve the Two Month Notice to End Tenancy so that it’s received:
- At least two months before the effective date of the notice, and
- Before the day that rent is due
For example, if rent is due on the 1st of every month and you receive a firm deal on March 15:
- You would give notice prior to April 1st. If the tenant as acknowledges it received by March 30th then the two months notice is now effective April 1st.
- The entirety of April & May would constitute as two months notice.
- The buyer could move in as of June 1st.
It is important to note that FOUR MONTHS NOTICE is required if the tenancy is being ended for demolition, renovation, repair, or conversion by the buyer.
Rules regarding notice to end tenancy if you have a FIXED TENANCY AGREEMENT:
If the tenancy is in the form of a lease, the new buyers of the property cannot move in until the lease expires, unless otherwise mutually agreed to by both parties.
The new buyer will have no power over to whether or not the tenancy will end early.
The only way to end this type of tenancy early is if both the seller (current landlord) and the tenant(s) agree and complete a “Mutual Agreement to End Tenancy” form.
Can I serve the tenant notice to vacate because I’m selling my home?
No. You cannot kick the tenant out just because you are selling the property. The tenant has a right to continue living in the property.
When do I owe compensation to the tenant for selling my home?
As a landlord, you would be required to give the buyer the equivalent of one month’s rent if:
- You serve a two month notice to end tenancy
- You serve a four month notice to end tenancy
After a tenant has received this notice from the landlord they are still entitled to compensation even if they choose to leave at an earlier date than served.
The tenant may choose to not pay rent in the last month of the tenancy instead of taking payment from the landlord.
You do NOT owe the tenant compensation if they serve you notice to end tenancy or state that they are ending their tenancy.
Can the buyer take over the tenancy?
Yes, the buyer can take over the tenancy.
If desired, the new buyer can arrange a new agreement to be drafted with or without amendments to the terms and conditions already stipulated.
If the buyer takes title of the property later than the 1st of the month, the rent for that month is typically adjusted and split between the buyer and the seller.
The security deposit originally collected is typically credited to the buyer upon completion.
If the buyer wants to move in to the home, what do they have to serve in terms of paperwork?
If the buyer would like the home to be vacant at the time of possession, on the contract of purchase and sale in the “possession” section of the contract they would add ‘vacant’ in addition to their move in date and time.
The buyer must also serve a written notice to tenants to move in, which would be provided by the buyer’s agent to the buyer to sign off on and then deliver to the seller’s agent.
When should I give my tenant notice to move out if I am selling my house?
When you decide to list your home, make sure to inform your tenant that you are selling.
It’s not certain that you will sell your home right away or if the new buyers would be interested in keeping the tenants, so it is usually best to give the tenant notice upon a firm deal (once you have an accepted offer with subjects removed) given the new buyers require the home to be vacant upon possession.
If the new buyers want to move in to the property, then proper notice will need to be given and the completion dates must align with tenancy law.
How do I deal with showings for the property?
The seller/landlord must give the tenant 24-hour written notice to show the property, which must include the date and time, as well as the reason for entry – in this case a potential buyer showing.
Generally with showing requests between the hours of 8am-9pm.
Written notice is typically the best way to deal with this, rather than calling them, try to make sure there is some sort of text confirmation to show that you gave them 24 hours notice.
Is the tenant required to vacate during showings?
The tenant does not have to comply with vacating the unit during showings, as landlords and realtors have to balance their need to show the unit with the tenant’s right to quiet enjoyment.
In the event that you catch the tenant providing dishonest or falsified information about your rental property to the prospective purchaser, Section 47 of the Residential Tenancy Act allows a landlord to issue a One Month Eviction Notice for Cause for knowingly giving false information.
How can I deal with an uncooperative tenant?
There are a couple of different ways to deal with uncooperative tenants when selling your house. Usually if they’re uncooperative, it’s when showings are occurring. Do what you can to prep them in advance, and let them know that you will always give them 24 hours notice as per the Tenancy Act.
If you want to, you can make a schedule with them in advance and have your realtor try their hardest to only show during those designated times. But keep in mind, the majority of buyers won’t re-book a showing if the first request is rejected, and it is your right to show the property as long as you give 24 hours notice. Don’t let the tenants bully you in to only 2 hours a week of showing times… but if they’re give you a fairly wide range like 2-8PM Monday to Friday and 10-2PM on Saturday and Sunday, then it might not be a bad idea to go that route.
If issues continue to occur after already having prepped them, opt for the following:
- Approach the tenant(s) directly and try to resolve the issue. See how you could make it easier for them when showing the property, and share your concerns as well.
- Supply the tenant with a copy of your rights and responsibilities as well as theirs, as per the BC Residential Tenancy Act with regards to showing and selling the home.
- Serve One Month Notice to End Tenancy for Cause for cause.
OTHER HELPFUL TIPS FOR SELLING TENANTED PROPERTY:
Tip #1: Don’t leave it all to the tenants! Work with them.
Hire a cleaner to go through the property and spruce it up a bit prior to taking pictures for the property. (it’s tax deductible!)
Ask the tenants if there’s anything that they’ve noticed that needs to be cleaned or even fixed (if they hadn’t mentioned it to you before), and make sure that’s all completed before a buyer has an inspection on the property.
The more you help them get through the hassle of selling their “home” and potentially having to find a new home ASAP, the more cooperative they will be.
Tip #2: If you’re thinking about selling in the near future, don’t get in to a new lease.
Wait for your current lease to expire, then switch over to the month to month if your tenant is still interested in staying in your unit. Potential buyers may need a relatively quick possession, and a long completion date (i.e. 6-12 months) can have an impact on your sales price.
Tip #3: If you’re not thinking about selling anytime soon, make sure to increase your rents accordingly every year.
A number of buyers may be looking to take over the tenancy, and if that’s the case they will want to make sure that they’re receiving market rent.
The amount of money that your tenant pays will have a direct effect on the price that your tenanted property sells for, so make sure that you’re increasing your rent within the parameters of the law accordingly.
Tip #4: It’s usually more difficult to sell and market a tenanted home, make sure that you really communicate well with your tenant about the sales process before you list.
Marketing goes a long way, and if your tenant is really messy it can effect the online marketing in terms of pictures, the virtual tour, and showings. It can also shy away buyers that come in to look at the property, but can’t see past the junk.
Try your best to communicate with your tenant beforehand, let them know that photography is important and your home needs to show well the day the pictures are taken, and also while the home is being shown.
Explain to them that you’ll give them lots of notice, 24 hours is plenty, and you’d appreciate it if they would cooperate with you, and that you’ll do the best you can to communicate with them and hopefully have an investor purchase.
Tip #5: Be aware of your rights. Read through the BC Residential Tenancy Act beforehand.
Don’t let your tenant bully you around and only book showings between certain times. You are entitled to show the home if you give them 24 hours notice. Do your best to be respectful of them and only show between 9AM-8PM, no later and no earlier.
Are you thinking about selling your rental property? Call us today at 604-765-0376 for your free evaluation and guideline of how to sell your partial or fully tenanted property. Prefer text? 604-319-0200. Or email us at firstname.lastname@example.org to start a conversation!
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