Selling a Property With Long-Term Tenants

DB-Selling-Tenants

Selling a property with long-term tenants – whether living in the main home or in a separate suite – is a relatively common occurrence in Whistler.

Showing courtesy to your tenants and staying on top of legal requirements can be overwhelming, but it doesn’t have to be. The key is ensuring that all parties – the owner, the tenants, and your Realtor® – understand their rights and obligations, communicate effectively, and show mutual respect.

Preparing for the Sale

The first step is to review, with your Realtor®, the written tenancy agreement currently in place, which outlines the terms of the lease. It is important to note that selling the home does not automatically end the tenancy – more on that later.

It is courteous to notify your tenant about your intentions to sell the property. They will probably have questions about how this will affect them, especially considering the low levels of inventory for long-term rentals in Whistler. It is also smart to establish ground rules and preferences, such as discussing how the tenant prefers to be contacted when coordinating property showings. Communicating clearly now can prevent headaches later.

Getting Informed

Point your tenant towards the BC Residential Tenancy Act so that they understand their rights and responsibilities as tenants. You should also review this yourself (although many key points are included in this post) and ensure that you understand and follow all legal requirements.

Preparing for Showings

There are two ways to go about showing a tenanted property.

First, the landlord and the tenant can mutually agree ahead of time on a schedule for property showings (e.g., Mondays and Wednesdays between 2 PM to 4 PM). If you choose to go this route, be sure to get the agreement in writing.

Second, the landlord can give the tenant 24 hours written notice ahead of a scheduled showing. The notice must provide the reason for entering the unit as well as the date and time of the showing. The showing must take place between 8 AM and 9 PM, unless the tenant agrees to another arrangement. If proper notice is given, the tenant cannot legally refuse entry.

To maintain positive relations, try to give the tenant as much notice as you can. This isn’t always easy, since showing requests can happen at any time, but your tenants may be willing to be flexible from time to time if you show them extra courtesy when you can. Be sympathetic to their needs – for example, if they have young children who go to bed early, avoid scheduling late night showings when possible.

At the Showing

The tenant is legally allowed, though not required, to be present at a showing. He or she may also have another person present on his or her behalf. Although it is generally easier to show a vacant property, you cannot require the tenant to vacate the space.

The landlord or, more commonly, his or her Realtor® must be present during the showing of a tenanted property.

Moving

Tenants will generally appreciate being kept up to date on the status of the sale. Try to answer any questions that might come up (or redirect questions to your Realtor®  or the Residential Tenancy Branch if you are not sure of the answer).

When the property is sold, the new owner assumes the role of the new landlord, and the tenancy agreement continues as it was initially written.

However, the new owners might not want to continue renting the property. If they intend to occupy it themselves or if it will be occupied by a close family member (specifically their parents, children, or spouse), they can provide a two-month notice to end tenancy. Note that this process can begin before they take possession of the property. A two-month notice can also be served if the new owners will be undertaking renovations that require the property or suite to be empty.

When a two-month notice is served to terminate the tenancy earlier than outlined in the tenancy agreement, the landlord needs to compensate the tenant with one month’s rent. This can either be paid out after the two months have passed, or the tenant can simply not pay the last month’s rent.

Uncooperative Tenants

If, despite your best efforts to maintain positive relations and communicate openly, your tenant is uncooperative, there are a few courses of action you can take:

  • You can encourage the tenant to contact the Residential Tenancy Branch.
  • You can serve a one-month notice to end tenancy for cause.
  • You can apply for a dispute resolution to resolve the issue at hand.

Saying Thanks

On the other hand, if your tenants are cooperative and accommodating, a little thank you goes a long way. Consider giving them a small gift, like a bottle of wine or a gift card to one of Whistler’s restaurants, to show your appreciation.