If you’re selling a tenanted property in British Columbia and the purchaser requires vacant possession, it’s important to understand your legal obligations under British Columbia’s Residential Tenancy Act (RTA).

Vacant Possession: A Potential Pitfall

Section 5 of British Columbia Real Estate Association’s Contract of Purchase and Sale for residential properties states that possession must be delivered as either “vacant possession” or “subject to the following tenancies.”  Without any additional wording, the obligation to provide vacant possession is unconditional, meaning the seller must ensure the property is empty at closing, regardless of whether they have legal grounds to end a tenancy.

A seller of a tenanted property who agrees to unconditional vacant possession risks being in breach of contract if they cannot deliver an empty property. Since a tenant cannot be evicted without legal grounds, they may find themselves in a situation where the tenant refuses to leave or demands substantial compensation for agreeing to end the tenancy through a Mutual Agreement to End a Tenancy.

Confirm Legal Grounds Before Promising Vacant Possession

Under section 49(5) of the RTA, a landlord can end a tenancy at the purchaser’s request if:

(a) the landlord enters into an agreement in good faith to sell the rental unit,

(b) all the conditions on which the sale depends have been satisfied, and

(c) the purchaser asks the landlord, in writing, to give notice to end the tenancy on one of the following grounds:

(i) the purchaser is an individual and the purchaser, or a close family member of the purchaser, intends in good faith to occupy the rental unit;

(ii) the purchaser is a family corporation and a person owning voting shares in the corporation, or a close family member of that person, intends in good faith to occupy the rental unit.

2024 Updates to Purchaser-Requested Tenant Evictions

In 2024, significant updates were introduced affecting the process for ending a tenancy due to purchaser occupancy. These changes include the following:

• Extended Notice Period: Landlords must now provide three months’ notice when ending a tenancy for this reason.
• New Web Portal Requirement: Landlords must issue the Notice to End Tenancy through the Residential Tenancy Branch’s (RTB) online portal. Before this can happen, the purchaser must submit a written request confirming their intent to personally occupy the unit. The seller then uses this request to generate the required notice.

If the purchaser does not provide this required confirmation, stating that they or a close family member will reside in the unit, the seller cannot legally issue the Three-Month Notice to End Tenancy through the RTB portal. This poses a significant risk for sellers who are contractually bound to deliver vacant possession at closing.

How to Protect Yourself – Clarify the Conditions in the Contract

Sellers should avoid agreeing to unconditional vacant possession or using ambiguous contract language. Instead, they should work with their Realtor to ensure their obligation to provide vacant possession is contingent on the purchaser providing the required Section 49(5) declaration to the Seller within the necessary timelines to comply with the RTA.

This article is for informational purposes only and does not constitute legal advice. Anyone requiring legal guidance should speak with qualified professional to understand their rights and obligations under applicable laws.