June 15th 2021
As landlords we are in the business of attracting and retaining tenants, not getting rid of them. But there are times and circumstances where it becomes necessary to part ways with a tenant. At such times there are specific procedures and time frames that need to be followed.
The first and most prevalent situation would be where there is a problem tenant. Problems such as not paying their rent or at least falling behind, situations where tenants are causing damage to the unit or disturbances to their fellow tenants, or where they are adding occupants to the unit to the point, the dwelling is not safe. In these instances, there are protocols that must be followed, notices given such as N4 for non-payment, N5 for interference, damage, or overcrowding, N6 for illegal acts, N7 for causing serious problems, and so on.
In each instance not only do the proper forms need to be used but notice periods and time for tenants to rectify the situations need to be honored. By following the procedures set out in the Residential Tenancies Act an eviction can be ordered and enforced, but it takes time, especially so if the tenant wishes to challenge.
What I want to focus on today, however, is the very specific situations where a landlord wishes to evict a tenant because the property is being sold and the new owner wants vacant possession. Those of you who know me will realize that in many ways this runs against the grain with me. As investors, one of the pillars of practice is to never sell. At the same time, however, I recognize that with the substantial spike in prices, some of you are inevitably going to sell in order to access equity. At the same time, others are going to want to capitalize on the significant increase in market rents, buy a rental property and remove an existing tenant so that rents can be raised to balance with today’s acquisition costs. If that can be done.
First, the Residential Tenancies Act (“The Act”) makes provision for a tenant to be evicted because the owner of the unit (or beneficial owner, if the property is changing hands) requires the unit for their own personal use. And let me add, the Act is quite specific as to what personal use means. This can be the owner or their spouse, the owner or their spouse’s parents or the owner or their spouse’s children. It cannot be extended to include brothers or sisters, aunts and uncles, best friends, and so on. Immediate family only as described by the Act.
It can also include a caregiver, but only if the caregiver will be occupying a unit in the same building as the one receiving care, ie: one apartment in a duplex or triplex where the special needs owner resides.
Now the Act is very specific as to how the owner goes about evicting the tenant. In this circumstance, they would use an N12 form. “Notice to End your Tenancy Because the Landlord, a Purchaser or a Family Member Requires the Rental Vacant”. This notice must be completed and given to the tenant on or before a rental payment date and provide at least 60 days notice from a payment date before the tenant is required to move out.
I should point out that while the tenant has the right to stay a full 60 days, he is not obligated to. Once he has been given the N12 he can leave with as little as 10 days' notice on his part. This is designed to accommodate him in the event he finds another unit which is available sooner than 60 days. Also, recently the Provincial Government introduced the Protecting Tenants and Strengthening Community Housing Act 2020. In circumstances where a tenant is being evicted via an N12, the landlord must compensate the tenant an amount equal to one month’s rent by the termination date on the N12 notice or offer the tenant another rental unit that is acceptable.
And I should add that this eviction process cannot be used to break a fixed-term tenancy. If the tenant has a lease in place with the landlord, that lease is binding and must be honored by the landlord and anyone taking over ownership of the property. Regardless of how urgently the owner/beneficial owner needs the unit, they cannot overstep a lease. They must wait until the lease goes into month-to-month overholding.
In a perfect world you’ve done what you need to gain vacant possession. The tenant has been given his 60-day notice. By law he has to move out. What happens if on the termination date the tenant hasn’t moved out. The new owner has sold his house, his moving truck is in the driveway. Your Agreement of Purchase and Sale promised vacant possession. But the tenant is still there. Now what? We’ll take a closer look at that sort of situation next issue.