You’ve decided it’s time to sell your rental property. Learn how to break the news to your tenants with tips on encouraging them to move before you list.
Selling your rental property can be an exciting time. If you’ve held it for some time, you are likely thinking of the money you are going to make and the joy of having one less property to manage. BUT for your tenant, the news that they may have to move is extremely stressful, especially if they’ve been there a long time and pay a lower rent.
Communication is key.
If you decide to sell, talk to your tenants before connecting with your realtor. Being empathetic and respectful of their concerns is in your best interest. Advise them of their rights; mainly that when their home is sold, they do not automatically have to move. This usually makes them feel a lot better. However, in the chance that they are served a notice to end their tenancy, let them know that you will provide them with a glowing reference, if they were good tenants, that is. You may also want to mention to them that they would be entitled to one month free rent in this case.
There are two ways their tenancy can legally be ended.
- If, in good faith, the buyer plans to live in the unit or have a close family member live there. Close family member means the new owner or their spouse’s father, mother or child.
- Or the buyer plans to use the property for another purpose. This could include extensive renovations or another reason as outlined in the Four Month Notice To End Tenancy.
If either of these are the case, the buyer must submit a written request to you as the seller to end the tenancy before taking possession of the property. Then you can give your tenant a legal notice to end their tenancy. Alternately, once the buyer takes possession of the property and becomes the new landlord, they can serve the tenant the same notice.
Now let’s talk about when you or your realtor can show the property.
In most cases, when you show up with your real estate agent to take photos of your rental property for the listing, you and your realtor will talk with the tenant to explain how the showings will work. Most realtors will just ask the tenant if it’s okay if they just phone or text them 24 hours in advance of a showing, and most tenants are fine with this arrangement. Your realtor will likely also tell the tenant that the preference is that they not be home for showings; however, this is ultimately up the tenant.
According to the BC Residential Tenancy Act (section 29), you or your realtor must have the tenant’s agreement or have given the tenant proper written notice that states the date, time and reason for entry. The tenant must receive this notice at least 24 hours, and not more than 30 days, before the time of entry. See our Rental Forms section for a free fillable Notice to Enter form.
You must keep in mind that a tenant is entitled to reasonable privacy and freedom from unreasonable disturbance. A notice indicating that showings will take place daily from 9am to 6pm for a two-week period would be unreasonable. You or your realtor are allowed to enter the common areas of the property at any time without giving the tenant notice.
When proper notice has been given or the tenant has agreed, the realtor can show the property even if the tenant is not there. During the showings, you and your real estate agent are obligated to make sure the tenant’s possessions are safe. This is the reason an open house is probably not the best idea.
If the tenant is home for showings, prospective buyers may ask them some questions. This is fine as long as the tenants do not deliberately try to extinguish the sale. If you received feedback that the tenant was uncooperative or provided misleading or inaccurate information to the prospective buyers, talk to your tenants. If that doesn’t help or your communication has broken down, consider giving them a written warning and if it happens again, you can give them with a one month notice to end their tenancy for cause.
If you would really prefer to have your property vacant prior to listing it for sale, talk to your tenants. Legally they do not have to move, but perhaps a cash offering can provide a nice incentive to help move them along. If this works, your best course of action to protect yourself is having them sign a Mutual Agreement To End Tenancy, but let them have a couple months to find another place. If a cash incentive is provided, do not give it to them until the day they hand you the keys.