Thinking of renting your home if it is empty and hasn’t sold yet and plan to keep a tenant in it until it sells?
Be careful. As of November 2012 it is not as easy to give notice to a tenant as it used to be. There have been significant changes to the Tenancy Act that may catch home owners off guard if they don’t check out the new regulations. Proper notice for a landlord to give a tenant to vacate the premises used to be three calendar months for a month to month lease. For the tenant to give notice to a landlord it was one calendar month. However, if a tenant had rented for five full years they had tenure and different rules always applied to that situation.
The Tenancy Act changed in November 2012 and I was informed when I called Service Nova Scotia that the changes also apply retroactively to leases signed prior to November 2012. This is very concerning, if it is accurate.
You can no longer give notice to a tenant to vacate at all on a month to month or a year to year lease, provided the tenant is in compliance with their responsibilities, unless you or a member of your immediate family require the house to live in it yourself, or you require renovations so extensive that vacant possession is required. Even then you can’t give notice to the tenant. You must to apply to the Director of the Tenancy Board for an order to vacate. They will hold a hearing to decide if you can give notice and also how long the notice must be.
This poses a huge challenge for homeowners who have been renting their single family dwelling and then decide they want to sell it to get their equity out, or decide to sell it for any number of other reasons people need to sell their homes. This is because the buyer would have to take the tenant along with the house, not something they likely want to do if they want to live in it themselves. The new owner would need to apply for an order to vacate if they intend to occupy the house themselves. That, of course, is the main reason people buy single family homes in the first place. The current owner/seller can apply on behalf of the new owner and can make a successful application a condition of sale in the agreement of purchase and sale, but that is a challenge, because agreements of purchase and sale are date sensitive. You don’t know how long it will take to get a hearing scheduled and an order issued, or how long the tenant will be given before they have to vacate. It is unlikely a buyer is going to spend money and time on building inspections and appraisals to buy a house when they don’t even know if or when they can move into it.
Hopefully, if you need to sell your home and you ask your tenant to vacate without going through the process of getting an order to vacate, your tenant will be easy to deal with and just leave when asked, assuming you give them reasonable time to find something else to live in, but they do not have to do so. This means you could end up being in breach of your agreement with your buyer if you have to give vacant possession on closing and the tenant decides not to leave.
There is a solution of sorts if you are not already in an existing lease. You can rent your premises on a fixed term lease, meaning it automatically ends on a specific date. No notice to vacate is therefore required. A fixed term lease can be extended by mutual agreement to another specific date. I am awaiting an answer to my question “Can the fixed term be tied to an event, instead of a specific date, for example, could it be thirty days from getting an unconditional offer to purchase on your house?” The reason I say a fixed term lease is only a solution of sorts is because it denies both a tenant and the homeowner flexibility in their rental arrangement
This change in the regulations impacts property owners of single family dwellings far more than owners of multi-unit dwellings. I am surprised single family dwellings were included in the regulation changes.
This information above is only my understanding from reading the updates on the Service Nova Scotia website and having a lengthy conversation with a very pleasant and helpful young lady who works there. This stuff is pretty new, so if you find yourself in this situation and need advice, contact Service Nova Scotia or ask your lawyer to help you navigate through the changes.
- Susan L. Green is the Broker/ Owner at Coldwell Banker M B Green Realty and holds a CRA Retired designation with the Appraisal Institute of Canada