When we think about buying and selling real estate, it’s easy to overlook that, in many cases, the property being sold is a rental property that likely has tenants. In fact, with a majority of households in Canada owning their homes nearly one-third of all homes in Canada are rental properties. 

While most real estate transactions are pretty straightforward, different rules apply when a rental property is concerned. Let’s look at the different scenarios you might encounter when buying a rental property that has tenants.

Scenario 1: You Want To Keep The Tenant(s)

This is the simplest scenario and has the least impact on timing and conditions of the sale. No matter if the tenant has a fixed-term or periodic tenancy (month-to-month), once the sale closes they will fall under your responsibility as the new lessor (a.k.a. landlord). In most provinces, any fixed-term lease will revert to a periodic tenancy automatically when it expires.

You may be asking, “Do I need to sign a new lease agreement?” While it’s not mandatory to sign a new lease, The rules in the Residential Tenancies Act (RTA) will always apply, regardless if there is a contract or not. If the parties sign a new lease, the landlord can change the terms ONLY if the tenant agrees and if the changes comply with the rules stipulated in the RTA.

Scenario 2: You Wish To Occupy The Home Or Rent To A Family Member

There are two ways this works, but in both scenarios it’s important to clearly state your intent to occupy the home or assign it to an immediate family member (parent, spouse or child)—this does not apply to extended family or close friends—as part of your purchase agreement.

The tenant has a lease that has not come to term: 

The tenant’s lease remains protected until the end of the fixed term. Therefore, landlords need to ensure the buyer is aware they must comply with the existing tenancy agreement. This means you must assume responsibility for the tenant and serve notice to end the tenancy no less than the minimum period required by law before the end date of their fixed-term lease.

If you need the home vacant at the time of purchase, then the sale can only close on the last day of the tenancy, and the current owner is responsible for providing notice. Notice must be given according to the laws of the province or territory in which the home exists. 

When it comes to this situation, The lease must be respected regardless. In this situation you could open a discussion with the tenants and try to find a monetary compensation that they are comfortable breaking the lease agreement for, so that all sides are happy.

The tenant’s lease is month-to-month: 

The same minimum notice requirements apply in this case, though notice can be given immediately once the terms of sale have been satisfied. If you require the unit empty, the sale can only close after the day on which the tenancy ends.

Scenario 3: You Wish To Demolish, Renovate Or Repurpose The Property To A Non-Residential Use

This is often where things can get difficult, especially if due diligence has not been taken to prepare ahead of time before ending a tenancy, or if the work is not completed within a reasonable timeframe after the tenancy has ended.

Generally, if a plan is in place to demolish the home, if the home requires substantial renovations that require it to be empty, or if it’s being converted to a non-residential use, longer notice times can be expected. The notice period is anywhere from two months to a full year, depending on the province.

In the case where a multi-unit building is replacing the original rental unit, or where renovations are concerned, the tenants have the right to move back into the unit once the work is completed. Or the landlord and tenant may agree to end the lease early.

In some cases the landlord may be required to pay moving expenses, or to compensate the tenant, depending on the province and number of units in the property.

Scenario 4: The Tenant Is Paying Below Market Rent

When a tenant has been residing in a home for many years, rent often falls below market, causing the only downside for a buyer when they wish to keep a tenant. As years pass, property values, taxes, and mortgage rates rise, increasing the overheads for landlords and narrowing profit margins. 

Most provinces set annual limits for rental increases to limit abuse, though the premise is that a landlord risks losing a good tenant if they unreasonably raise the rent. A landlord must follow a minimum notice period, and if they have good reason to increase the rent beyond the guidelines, they can apply for permission from their provincial landlord tenant board. 

Rent may also be increased beyond the guideline amount if it’s justified by investing in improvements or renovations to the property.

Residential Tenancies Acts Resources

While there are many similarities from province-to-province, notice periods and restrictions on ending tenancies can differ greatly. For British Columbia rules and regulations please see: 

https://www.bclaws.gov.bc.ca/civix/document/id/complete/statreg/02078_01#section49

Lunar New Year or as many of us know it Chinese New Years falls on Friday February 12th, this year. 

Lunar New Years is celebrated throughout the world and can last for weeks. 2021 is the Year of the Ox. The Ox is a symbol of hardwork, persistence and honesty. 

There are 12 Zodiac signs each year has its own animal sign: Rooster, Dog, Pig, Rat, Ox, Tiger, Rabbit, Dragon, Snake, Horse, Goat, and Monkey.

Red is the main colour of this holiday, as it is believed to be a lucky (auspicious) colour. Red lanterns, decorations of Oxen and red envelops filled with money are commonly seen.

On New Year’s Eve, families traditionally gather to celebrate the new year. First, homes are thoroughly cleaned to sweep away bad luck and to welcome good luck. At midnight  fireworks are usually lit at midnight. Festivals that include parades with dragon and lion dances are seen in neighbourhoods and families pay homage to the gods and their ancestors. Children receive money in red envelopes and gifts are exchanged between family members.

However, this year will be different due to the pandemic. Families are being asked not to travel to see extended family. There will be no parades or lion dances or the Lantern Festival.

Hopefully the year of the Ox will bring an end to the pandemic with vaccines being administered.

So althought you cannot meet your family and have the usual Lunar New Year Celebrations.

Xin Nian Kuai Le!

(New Year Happiness!) 

or 

Gong Xi Fa Cai!

(Happiness and Prosperity!)

Thinking of renting out your condo, basement or house? Here is some advice for small landlords and how to avoid difficult situations with your tenants.

It’s important to be prepared. Familiarize yourself with the Landlord and Tenant Board, the paperwork required to evict someone, and the standard lease agreement, before even advertising the unit.

You should have a financial cushion that can cover at least six months of the mortgage and other costs of the unit in case you don’t have rental income, as well as a little extra to cover legal fees. A month-to-month rental agreement instead of a lease with a fixed term, is also recommended, as it gives you more flexibility.

Screening is key when choosing a tenant, as you’re assessing risk. You need to look at the applicants’ income, employment, credit check, references and previous tenancies, and it’s important not to take any information, such as phone numbers, for granted. Always Google a person or workplace to check that the available information matches what’s on the application.

Assessing a potential tenant is a balance of intuition and looking at the facts. You can tell a lot about an applicant by meeting them in person, but you should still check everything even if you think the person seems trustworthy. “Do the math” yourself to see whether the applicant’s income seems like enough to cover their monthly costs.

As soon as something seems off — whether it’s a global pandemic or a late rent payment — the landlord should reach out to the tenant to figure out a compromise. However, you should also serve notice just in case, as that can always be withdrawn once the tenant pays rent or agrees to a payment plan. Throughout the tenancy, it’s important to have all agreements in writing.

Above all, the landlord needs to be professional and nice, regardless of the situation, as expressing one’s frustration or anger won’t help solve a difficult tenant situation.

With a 2030 goal for provinces and territories to adopt a national building code that makes Canada “net zero energy ready” and a 2050 deadline to bring the country’s carbon emissions down to net zero, the building industry has been busy implementing guidelines to move the process along.

In Canada, buildings are responsible for 17 per cent of greenhouse gas emissions — 30 per cent when you factor in the carbon from the build process and materials. The road to net zero may be long but the new home industry has already taken big steps, starting with the creation of net zero homes. 

Net zero means that on an annual basis, the home produces as much energy as it consumes. It’s a trend driven not just by the 2050 deadline but by new home buyers looking to reduce energy costs and do their part to address climate change.

The Elements Of A Net Zero Home

Net zero is more than just building “green.” It incorporates green features like upgraded insulation, triple-pane windows, energy efficient furnaces and hot water tanks and energy-rated appliances but takes the entire home into account.

Net zero homes have south-facing solar panels, heat exchange systems, south-facing windows to capture passive solar heat and technology that automatically turns off lights and appliances when not in use. They are airtight, super insulated and sealed.

In order to achieve net zero status, homes must be verified through energy modelling. To be labelled net zero under the Canadian Home Building Association’s (CHBA) Net Zero Labelling Program, homes must be 100 per cent more efficient than what the building code stipulates.

Buyers Demand Energy Efficiency

Four of the top 10 buyer must-haves were energy efficient features. At the very top of the list were appliances, ranking higher than highly coveted walk-in closets. Other desirable attributes were energy efficient windows and overall efficiency.

Air exchange systems ranked higher than two-car garages. Home buyers are looking for heat and energy recovery systems that enhance indoor air quality while minimizing heating costs.

The Net Zero Lifestyle

Simon Gosgnach is the owner of Edmonton’s first net zero home which was built in 2012. He has no gas bill, and his home produces most of its own electricity.

“When you look at our utility savings each month, it is amazing how that reduces the cost of home ownership. Looking back, it is obvious that it was a solid investment that directly contributes to a better environment,” he says.

A net zero home is a healthier home with more even heat distribution. Less air leakage means less dust. There’s higher indoor air quality which is important.

“Where did you get that?” An enthusiastic and genuine question those who thrift furniture get asked all too often. Whether you’ve upcycled a dining room table or refinished an antique armoire, you know those unique pieces have a way of attracting the eye of house guests.

Filled with charm and character, thrifted furniture is an excellent option for those on a budget, looking for a distinct piece to complete a design vision, or those simply hoping to make a positive impact on the environment and their community.

So, if you’re interested in upcycling, thrifting, or collecting, here are some thrifting tips to help you find and give new life to classic pieces.

Why Thrift For Furniture?

While purchasing second-hand furniture might sound appealing to those trying to get a deal, it has many benefits beyond your pocketbook.

Better Quality

Let’s be honest, they don’t make furniture like they used to. Most furniture built in the past was meticulously made by hand using real solid wood. It’s these types of quality pieces that really stand the test time.

Better For The Environment

The fast furniture industry is enormous and wasteful. Made of inexpensive plastics, particleboard, and resin, fast furniture items not only break quickly but look dated in only a few years. Opting to buy furniture second-hand reduces demand for new resources, therefore reducing the energy and waste needed to produce, package, and distribute new items. It also keeps our landfills clear of pieces that take millennia to break down and decompose.

Better For Your Community

Buying second-hand is a simple and effective way to help support your community. Whether you purchase items from an individual looking to declutter their home and make a few bucks or a thrift store in your neighbourhood, that money gets reinvested into the local community.

Where To Look

If you’re interested in thrifting, a great place to start is from  the comfort of your own living room. Websites like Craigslist, Facebook Marketplace, Kijiji, and second-hand apps like Carousell are filled with private sellers hoping to find new homes for their items. You can also score some deals and find unique items on eBay and online auction sites.

If hunting for pieces in-person is more your thing, head out to thrift stores, consignment shops, or flea markets. If you live in a bigger city, head to the outskirts of town to search for items, as inner-city stores and markets are often more expensive  and picked over. Estate and garage sales are also great opportunities to pick up quality furniture at a reasonable price.

Tips For Thrifting

Don’t let the thrill of the hunt get the best of you. Follow these tips and you’ll be successful in your second-hand pursuit.

Establish A Budget And Stay Within It

You can form a realistic budget by visiting popular furniture stores and pricing out a similar item.  Know exactly how much you have to spend before making your purchase. Shop using cash. Not only does it allow you to keep track of your spending, most garage sales, flea markets, and small thrift shops prefer cash. Lastly, be aware of hidden costs. While the piece itself might be a steal, consider all that must go into the item after the fact and how much those refurbishments will cost (don’t forget about shipping if you’re shopping online!).

Be Flexible, Yet Focused

When it comes to thrifting, you never know what you’re going to find (or not find). If you set out to find a particular piece but come across another item that you love, change your plans. But make sure you stay focused on your overall design goal and don’t go overboard for the sake of not missing out on a great deal.

Get Creative 

Look beyond an item’s intended use to uncover hidden potential. Repurposing is a great way to breathe new life into old items. Turn an old dresser into a bathroom vanity. Use an old ladder as a blanket rack. When you look at an item with repurposing in mind it might go from garbage to treasure.

Inspect Before Purchasing 

If you have the opportunity, inspect the item before purchasing. Look for mildew, stains, warping, cracks, and smells (like urine or smoke). If purchasing the item online, and an inspection is off the table, ask the seller to send pictures or video of any known damage as these are often not included in the original listing. Lastly, if the item is upholstered and in need of repair, store it outside of your house (in a garage or storage locker) until you’re able to properly tend to it–bed bugs don’t just hideout in beds!

Look Beyond

It’s hard not to get caught up on every scratch and dent but look past the surface and focus on the bones of the piece. Is it made of high-quality wood? Is it solid and sturdy? Is it comfortable? Items that have good bones often make the most beautiful, rehabbed pieces that last well into the future.

Routinely Shop 

Being patient and shopping frequently are the two keys to success when thrifting. Keep an eye out for garage and estate sales. Shop your local flea markets, thrift and vintage shops, and consignment stores weekly. Check online listings and apps every few days. Don’t get discouraged if your perfect desk, table, or side chair is nowhere to be seen on your first trip out. 

Happy Hunting!