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In our last email, we talked about rent credits for buyers when they take over an existing tenant. We also discussed the existing tenant lease and what the buyer could or could not do regarding that lease.
Let's go back to our previous scenario. The sale property had a tenant that our buyer was happy to take over. However, this time instead of taking over the tenant, the buyer would like to have the tenant gone.
In this scenario, when a buyer purchases a property with an existing tenant, the buyer steps into the landlord's shoes. The buyer is in the position of any landlord. That is, the tenant gets to stay until there is a reason to evict them under the Residential Tenancies Act (RTA) or until the tenant gives notice that they are leaving.
Being a new buyer gives rise to a couple of special situations where a new buyer can evict the tenant. Those reasons are found in the RTA's Ministerial Regulations (Regulations).
Section 2 of the Regulations says that once the purchase contract is unconditional, the buyer can request in writing that the seller give the tenant notice to vacate. That notice would be effective three months after the end of the tenancy month in which notice has been given.
Section 2 of the Regulations also says there is a legal reason to give the tenant notice if the buyer plans a major renovation. However, the notice period here is a substantial 365 days, not three months.
It is important to read the regulations carefully. You can find them online at no cost through the following steps:
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Google Kings Printer, Alberta
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Choose the Laws Online Catalogue
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Look for the Residential Tenancies Act, Residential Tenancies Act Ministerial Regulations, and, more particularly, Section 2 of those Regulations.
Again, these kinds of questions can be a little tricky, so if you are not comfortable with the nuances of how the regulations work, refer your clients to their lawyer.
Protect yourself.
Cheers,
Barry
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