There is a Tenant in my home!!

FYI, this blog is NOT about squatters (neither the gym kind, nor those that decide to post up in your empty home). That’s a whoooooole different blog altogether. You need the PO-lice for that one.

If you don’t get that reference, google N.W.A songs. Once you know, you know, and it’s funny!

But no, we are talking about a home that you want to buy, but currently has tenants living in it. Whether you have come across this before or not, this is a good topic for you to learn as it can really bite you in the backside, if you don’t know how to handle the situation.
First of all, you will need to find out what kind of lease they are in. This will typically be one of two options, these being:

  • Fixed Term Lease
  • Month-to-Month Lease

You can speak with your REALTOR on this one as they can find this out from the agent who is representing the seller. Let’s break down how each of these scenarios need to be handled differently, starting with Fixed Term tenants.

Fixed Term Lease
This is a lease for a set period (commonly 12 months). This is your standard lease. The tenant rented the unit from February 1st 2018 and their lease expires January 31st 2019. When this is the case, no matter when you buy the unit, you cannot move in till at least the end date of the fixed term (unless you make a private arrangement with the tenant.) So typically, the best thing to do is arrange notice when you purchase the unit. Notice has to be 2 FULL calendar months. So in the above example, you purchase the home on November 15th. You give the 2 full calendar months notice, meaning the tenant has all of December and all of January. Then when the lease ends, they move out and you can move in, simple right?

Well what if you buy the unit and there is 1 month left of the fixed term tenancy? Good Question! You still have to give the full 2 calendar months notice. Using the above example, you purchase the unit December 15th. You will have to give the two full calendar months, meaning all of January and all of February. Then you can look to move in from March.

Important note here - When giving the two full months, the tenant is entitled to the second month FREE if the 2 months go beyond their existing tenancy. If the 2 months notice falls within their existing fixed term tenancy they do not get the free month. Be cautious of who is going to pay this when purchasing a home. Are you happy to take it on or are you willing to wait to take vacant possession?

Month-to-Month Lease
Usually what happens at the end of the fixed term lease (see above) is the lease runs automatically in a month to month lease. Basically meaning it automatically renews every month. The same as above is required, however you can give the notice immediately and they will have 2 full calendar months, then must move out. You do not have to wait until a certain time beyond 2 full calendar months like a fixed term lease. Again, the same applies on the second month being free, so pay attention to the above note.
Once the tenant is out, there are still rules. If you want to rent out the home once they are gone, you cannot do so without moving in for at least 6 months. Otherwise if the tenant files a complaint, they can pursue you for a full 12 months rent!! If you plan on moving in then you’re good, go right ahead!

Before pursuing, make sure you are all on the same page. Are you take possession when the unit is vacant? Or are you take possession and assuming the lease, meaning it is down to you to repay damage deposits, and the free month included in the notice, not to forget any damages incurred by the tenants to the unit.

If you know your options ahead, this makes life a lot easier! We’ve seen people being burnt by this unfortunately. When it comes to us, we’ve got you covered on this type of thing!

Until next week,

Jay Mcinnes
T: 604.771.4606

Ben Robinson
T: 604.353.8523