Buying a Tenanted Property

When deciding to purchase a property, it is best practice to always confirm with the current owner whether there are any tenants residing in the property. Buying a tenanted property can come with additional legal responsibilities, so understanding your options early can help you avoid costly surprises.

Your Options When Buying a Tenanted Property

If you purchase a property with tenants in place, you generally have two main options below, depending on your plans for the property.

Option 1: Evict the Tenant and Move Into the Property

If you plan to move into the property and do not want tenants to remain, you could ask the seller in writing to give three month notice for purchaser occupancy of the rental unit.

Key points to remember:

• A minimum three-month notice is required

• You (or an eligible immediate family member) must occupy the unit in good faith

• You must intend to live in the property for at least 12 months

Option 2: Keep the Existing Tenants

If you plan to rent out the property within the first 12 months after purchase, you cannot evict the current tenant and re-rent the property without risking significant penalties (12 months’ rent compensation).

Reminder: If you retain the tenants, you should request a copy of the tenancy agreement from the seller in order to make appropriate adjustments during the purchase transaction and determine how the tenancy will be handled after completion.

Warning:

Always be aware of the Mutual Agreement to End Tenancy between the current owner (the Seller) and the tenants. It should be made in good faith, and you (the Buyer) have never requested the Seller to evict the tenant. Otherwise, be prepared to assume the tenancy and keep the existing tenants.

Warning:

Once the tenants move out, you cannot re-rent the property for the next 12 months. According to the Residential Tenancy Branch (RTB), if existing tenants are evicted and the property is later re-rented to new tenants within 12 months, it is generally considered a bad-faith eviction and the landlord may be required to pay the evicted tenants up to 12 months’ rent as compensation.