Tenanted Property

Yes. Under the Residential Tenancy Act (SBC 2002, c. 78), a tenancy agreement is binding on a new owner after the property is sold, and the tenant's rights and obligations continue uninterrupted. The new owner steps into the role of landlord and must honour the existing tenancy terms, including the agreed rent amount and any conditions in the tenancy agreement.

A buyer cannot end a tenancy arbitrarily upon purchase; the Residential Tenancy Act sets out specific grounds for ending a tenancy, including an end of tenancy for the landlord's or a close family member's use of the property. The new owner must serve the tenant with the prescribed notice period using the correct Notice to End Tenancy form, and the tenant is entitled to one month's rent in compensation in the case of a personal-use eviction under the Act. Failure to genuinely occupy the property after issuing such a notice can expose the new owner to significant penalties.

Under the Residential Tenancy Act, a new owner ending a tenancy for personal use of the property must give the tenant at least two months' written notice before the effective date, which must be the last day of a rental period. The notice must be on the prescribed form, and the tenant is entitled to one month's rent as compensation payable on or before the date the notice is given. Consult the current BC Government guidance for any updates to notice period requirements.

Under the Real Estate Services Act (SBC 2004, c. 42) and the rules made under it administered by the British Columbia Financial Services Authority (BCFSA), a licensee must disclose all known material latent defects and material facts affecting the property, and the existence of a tenancy agreement is a material fact that must be disclosed to prospective buyers. Licensees must also ensure that access to the property for showings complies with the Residential Tenancy Act's notice requirements to tenants, typically at least 24 hours' written notice.

The new owner, as the new landlord, inherits the existing rent and is subject to the same rent increase rules under the Residential Tenancy Act as any other landlord. Rent increases are generally limited to once every 12 months and must not exceed the allowable increase percentage set annually by the BC Director of Residential Tenancy; consult the current BC Government guidance for the applicable percentage in the relevant year. The new owner must give the tenant the required written notice before any lawful increase takes effect.

The Strata Property Act (SBC 1998, c. 43) and its Regulation impose obligations on strata lot owners regarding their tenants, including requiring the owner to provide the strata corporation with a copy of the tenancy agreement or a Form K notice of tenant's responsibilities. When the strata lot is sold, the new owner assumes the landlord role and must ensure ongoing compliance with strata bylaw obligations, while the tenant's existing rights under the Residential Tenancy Act remain unaffected by the change in ownership.

The Property Transfer Tax Act (RSBC 1996, c. 378) applies to the transfer of tenanted property in the same way as any other residential property transfer, with PTT calculated at 1% on the first $200,000 of fair market value, 2% on the portion from $200,001 to $3,000,000, and 3% on the portion above $3,000,000, plus an additional 2% on the residential portion above $3,000,000. The presence of a tenancy does not itself create a PTT exemption, though other exemptions such as the First-Time Home Buyer exemption may apply if all eligibility criteria under the Act are met; consult the current BC Ministry of Finance guidance for applicable thresholds and eligibility conditions.

If a tenant does not vacate after a valid Notice to End Tenancy has been served under the Residential Tenancy Act, the new owner as landlord must apply to the Residential Tenancy Branch for a Dispute Resolution hearing to obtain an order of possession. The new owner cannot change locks or remove the tenant's belongings without a valid order of possession; doing so constitutes an unlawful act under the Act and can expose the landlord to liability.

Under the Residential Tenancy Act, a landlord or their representative may enter a rental unit to show it to prospective buyers, but must generally give the tenant at least 24 hours' written notice and can only enter between 8 a.m. and 9 p.m. unless the tenant agrees otherwise. Repeated or unreasonable entry requests could constitute harassment under the Act, so it is important that the seller, buyer, and their licensees coordinate access in a manner that respects the tenant's rights.

Under the Residential Tenancy Act, the security deposit (and pet damage deposit, if applicable) is held in trust for the benefit of the tenant, and responsibility for it transfers to the new owner upon completion of the sale. The seller and buyer should address the transfer or accounting of the security deposit in their contract of purchase and sale to ensure the new owner holds the correct amount; if the deposit is not transferred, the new owner may still be liable to the tenant for its return at the end of the tenancy.