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Evicting a Tenant
My client called me and said, “Barry, I've sold my rental property."
"That's great, I know you are tired of being a landlord. What about your tenant?"
"No worries, I told the tenant I was going to sell. Then I got an offer that looked good. The buyer said they wanted to move in. So, I gave the tenant official notice as soon as I got that offer. I even tacked it to the front door and took a picture of it."
Now the alarm bells are going off! Is this proper, legal notice to the tenant?
In previous versions of the Residential Tenancies Act (RTA), a landlord could evict a month to month/periodic tenant (but not a fixed-term tenant) for any reason with three months’ notice. Now, a landlord only has limited rights to evict a tenant as set out in the Ministerial Regulations to the RTA, S. 2(2). To give proper notice, notice must follow the Regulations.
The good news? The fact that the buyer wants to move in is a valid reason to evict the tenant. The bad news? My client must follow the Regulations, which for this situation are:
A landlord may terminate a periodic tenancy if the landlord has entered into an agreement to sell the residential premises of the tenant in which all conditions precedent in the agreement have been satisfied or waived and the purchaser requests in writing that the landlord give the tenant a notice to terminate the tenancy.
My clients notice to their tenant is invalid because they gave the notice before the deal was unconditional.
If discovered promptly, proper notice can be given once the deal is unconditional. Problem solved.
If not discovered and you find the tenant won't leave voluntarily as the closing date nears, closing this deal will be delayed until the proper three tenancy months’ notice have been given. This may cause deals to collapse, or buyers might still be able to close but could claim for damages while they live in a hotel for three months and store all their household possessions at great expense!
NOTE: The Ministerial Regulations to the RTA are a short and easy read. You can find any piece of legislation or the regulations for that legislation here.
There are other reasons that a landlord can evict a tenant – two of those being if the property is going to be demolished or totally renovated. These examples and other situations have differing rules and timing for notice, so read the Regulations if you plan to advise your client. Inaccurate advice could kill or delay a deal.
Don't have your client pointing at you!
Protect yourself.
Cheers,
Barry
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