You found your dream home but it’s tenant occupied. What next?



HOW ARE YOU GOING TO GET VACANT POSSESSION?

Good news! When you are buying a property that is tenant occupied and you or your immediate family are going to occupy the space now used by tenants you can ask the seller/landlord to serve the official ‘Notice to End’ on your behalf. This is based only on month to month tenancies where the rent is payable on the 1st of each month.

Stay out of real estate jail

This is the only reason you are allowed to have the seller/landlord serve the notice unless you and/or the seller/landlord come to a mutual agreement with the tenants to mutually agree to end the tenancy. This usually involves some kind of monetary compensation to the tenants. If this is the case, make sure you confirm this by having a statement in your offer and you could also ask for a copy of the ‘Mutual Agreement to End’.

When you make your offer there are three items you must always consider in order to make sure you do receive vacant possession:

1. The first is that you write a clause in your contract asking the seller/landlord to serve the official ‘Notice to End’ if so requested by you. If you do not ask the seller/landlord to do this then they do not have to serve the tenants notice so make sure you always include this statement. Your REALTOR® will assist you with the correct clause.

2. The second item is that you must have removed all your subject clauses. In other words, your offer must be subject free.

3. Once steps one and two have been completed you as the buyer give the seller/landlord written notice that you and/or your family are moving in. The seller/landlord will then serve the official ‘Notice to End’ to the tenants as per the Residential Tenancy Act. There are severe penalties if you do not move in and occupy the space used by the tenants, so be sure to follow the rules of the Residential Tenancy Act.

Because notice cannot be served to the tenants until all subjects are removed a seller/landlord will often serve the official ‘Notice to End’ on the subject removal date. [There are ‘official’ forms on the Residential Tenancy Office website.]

The official notice period for month to month tenants who are paying rent on the 1st day of the month is 2 months ending on the last day of the tenancy period; not the first day of the month. Tenants have to vacate at 1:00 p.m.

Calculating the date and time you as buyers can move in is critical. Since the tenants must vacate on the last day of the monthly tenancy period [not the 1st of the month] and they have to leave by 1:00 p.m. you would want your offer to allow you to move in after 1:00 p.m. You don’t want two moving vans at the same time; therefore, make your possession time around 4:00 p.m. or so.

Most of the official ‘Notice to End’s’ are served by the seller/landlord on the date your offer becomes subject free. If your subject free offer is December 31st and that is the date the seller/landlord serves the 2 month notice to the tenants it means you would be allowed to move in on February 28th any time after 1:00 as per your instructions in your offer; often 4:00 p.m.

If you or the seller/landlord delayed serving the notice until January 1st then you could not move in until March 31st.

The easiest way to calculate the dates is to take the date the notice is or will be served to the tenants; e.g. December 31—go to –January 31 – go to — February the 28th which is the end of the tenancy period and the date you could move in.

If you or the seller/landlord delayed and served notice January 1 – go to February 1 – go to March 1 – and then you must go to the end of the tenancy period which would be March 31st. You lose a month by delaying just one day.

So, if the 2 month term falls in the middle of a rental period, go to the end of that period. Notice is not effective until the last day of that rental period.

Remember that real estate agreements must be in writing so it is often wise to add in a statement where you receive the confirmation of tenancy arrangements. Your offer will have the seller/landlord confirm that the tenancy is month to month, the name of the tenants, the monthly rental, any deposits taken, etc. You could add in that “Any damage/security deposit and any pet deposit taken will be adjusted between the parties on closing”. This is then an agreement between the sellers/landlords and buyers that the lawyers/notaries will take care of calculating everything.

One other statement you may want to include in your offer is that the seller/landlord guarantees that they will pay the one month’s free rent or give the tenants one month’s rent free. This is a regulation under the Residential Tenancy Act.

Your realtor is familiar with the Residential Tenancy Act rules and regulations when asking tenants to vacate and will make sure your offer contains all the correct statements and subjects. They will also assist you with calculating the date and time you can move into your new home.

 

barbaraBy Barbara Bell-Olsen, author of ‘Stay out of Real Estate Jail’ and ‘The Ultimate Collection‘; Managing Broker, Royal LePage Westside.
Website | www.barbarabellolsen.com
E-mail | barbarabellolsen@shaw.ca

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