Can you evict tenants when you take over a building?
I often get this question by landlords who buy buildings with undesirable existing tenants or tenants paying below market rent. When you purchase a building often times buyers will ask for vacant possession at time of closing. If this is written into a purchase and sale agreement it is important for the buyer and seller to understand the law.
In Nova Scotia and several other parts of Canada and the USA, there are laws to protect the tenants and the new landlords.
When a building is sold in Nova Scotia the existing leases are automatically transferred to the new landlord. This means all conditions and notice to quit by either the tenant or landlord apply as if the building never changed hands.
Tenants have to give proper notice based on their particular lease, if they plan to leave (this can be common after a change of ownership).
Landlords have to provide proper notice also (this includes if they wish to increase the rent).
If you purchase a property that has existing tenants and leases in place you cannot evict your tenants. Everything stays the same.
You cannot raise the rent without proper notice (NS Guide pg 13, section 11 A landlord shall not increase the rent to a tenant for the first 12 months. If the landlord wishes to increase the rent the following timelines apply:
(a) a year-year lease, four months prior to the anniversary date.
(b) a month-month lease, four months prior to the anniversary date
(c) a week to week lease, eight weeks prior to the anniversary date
You can evict tenants for the following reasons:
The landlord needs the property for there own use, or would like to do renovations that require the building to be vacant. You, as the new landlord will have to apply for a hearing at the residential tenancy office and the tenancy officer will decide how long the tenant has, until they have to be moved out.
If the property is seized by a bank or other financial institution that is foreclosing, the tenants have three months to leave.
I have also had clients work out deals with current tenants. It is important that you make sure the tenant that you want to leave understands all their rights and is interested in making a deal. They need to know what their options are.
Making a cash offer in return for early termination of a lease can be a great way to deal with undesirable tenants. If you are planning a large renovation, I think we all know time is money, so what you can do is make an offer for a quick move out. You can create a win win situation for you and your tenant.
Here is an example of an early termination offer: Agree to pay your tenant $1000 plus return the damage deposit based on certain conditions. A main condition would be to have the place completely cleaned out. Also to have them move out by a certain time. Ideally 30 days.
Make sure to be fair (perhaps on the side of generous) when you are making a deal.
If you are planning a rental increase, make sure to be sensitive, ethical and fair. This can be a difficult conversation especially if someone is paying way below market rent. If you are planning a large increase, let your tenant know what to expect. Spread the increase out over a certain amount of time. Communication is crucial.
I want to note that the information in this article is based on the Nova Scotia residential tenancy act, make sure to refer to your local residential tenancy guide.
Michael P Currie