Selling a home with tenants in BC

Many BC homes for sale have tenants in them: a condo held as an investment, a basement suite, a house rented out after a move. Selling one is completely possible. But the Residential Tenancy Act decides how and when you can deliver the home empty, and getting it wrong can delay completion or cost you a year's rent. The notice rules changed twice in 2024 and 2025, and a lot of advice online is out of date.

The rule that shapes everything

A landlord can't end a tenancy because they want to sell. Selling isn't a reason the Act recognizes.

What the Act does allow is for the landlord to end a tenancy for the buyer, under three conditions:

• The sale is firm, with all conditions satisfied.
• The buyer asks in writing.
• The buyer, or a close family member, intends in good faith to live in the home for at least 12 months.

Close family means a parent, spouse or child of the buyer, or the parent or child of the buyer's spouse.

So an investor buying to rent out has to take the tenant with the home. A buyer who will live there can get it empty, but only after subjects are removed, and only with enough notice. That's why your completion date needs to be planned around the tenancy.

Four ways to sell a tenanted home

• Sell with the tenant in place. The buyer, usually an investor, takes over the tenancy on the same terms. There's no notice and no compensation, and completion can be as quick as any sale. You're limited to buyers who want a rental.
• Sell to a buyer who will live there, with vacant possession. After subjects come off, you serve a three-month purchaser's use notice at the buyer's written request. Completion has to be on or after the notice's effective date. This opens up the larger owner-occupier market, with a longer timeline.
• Agree with your tenant to end the tenancy. A tenant who wants to move, often with a payment, can sign a mutual agreement to end the tenancy on a set date. You can then sell the home empty. It has to be genuinely voluntary.
• Wait for the tenant to leave. If they've given notice, or are planning to move, list once they're out.

What you can't do is serve a notice saying you or your family will move in when the real plan is to sell. That's bad faith, and the tenant can claim 12 months' rent.

The purchaser's use notice, step by step

1. Subjects are removedThe sale is firm

   The notice can't be given while any condition of the sale is outstanding.

2. The buyer asks in writingRight after subject removal

   The request confirms that the buyer, or a named close family member, intends in good faith to occupy the home. Keep it with your records.

3. Generate the notice on the RTB web portalRequired for purchaser's use

   The Three Month Notice to End Tenancy for Purchaser's Use of Property (RTB-32P) must be generated through the Residential Tenancy Branch web portal. A notice written or downloaded any other way isn't valid.

4. Serve it properlyThe receipt date sets the clock

   In person, the tenant receives it that day. Attached to the door, it's deemed received three days later. By mail, five days later. Keep proof of service.

5. Effective date: at least three months, at the end of a rental periodSince June 18, 2025

   For rent paid on the 1st, that means the last day of a month, at least three full months after receipt. For a fixed-term tenancy, it can't be before the end of the term.

6. The tenant can disputeWithin 21 days of receipt

   A dispute goes to a Residential Tenancy Branch hearing, which can push dates back.

7. The tenant can leave earlyWith 10 days' written notice

   They keep their right to compensation.

8. Compensation: one month's rentOn or before the effective date

   Either pay it, or the tenant doesn't pay the last month's rent. If they've already paid it, refund it.

The notice period has changed twice. It was two months before July 18, 2024, four months from then until June 17, 2025, and three months for notices generated from June 18, 2025.

Good faith, and the 12-month rule

The buyer, or the close family member named, has to start living in the home within a reasonable time after the effective date, and stay for at least 12 months.

If that doesn't happen, the tenant can apply for compensation of 12 months' rent. On a $2,800-a-month tenancy, that's $33,600. That can happen if the buyer re-rents the home, renovates and flips it, or leaves it empty. The buyer who asked for the notice can be held responsible.

As the seller, protect yourself two ways:

• Keep the buyer's written request.
• Have your lawyer include a clause in which the buyer confirms their intention and indemnifies you if they don't follow through.

This notice isn't available in purpose-built rental buildings with five or more units. Strata units are not affected by that limit.

Showings and the tenant's rights

Tenants have the right to quiet enjoyment of their home, even while it's for sale. To enter for a showing, you must give at least 24 hours' written notice, stating the date, a time between 8 am and 9 pm, and the reason. Showings must be reasonable in frequency. The tenant doesn't have to leave during a showing, and can't be required to clean or stage for you.

What works in practice:

• Talk to the tenant before you list, and explain the timeline.
• Agree on showing windows that suit them, such as two blocks a week.
• Offer something in return, in writing: a rent reduction during the listing, a professional clean before and after, or help with moving costs if the buyer wants the home vacant.
• Ask before photographing their belongings, and use listing photos that don't identify them.
• Consider virtual tours to cut down the number of in-person visits.

A cooperative tenant makes a sale faster and better. An uncooperative one, who is within their rights, can make showings hard and push buyers away. It's worth investing in the relationship.

Tenanted or vacant: which sells for more?

Usually vacant, for condos, townhouses and houses. Owner-occupiers are the largest group of buyers, and they can't use a home they can't move into for months.

Investors price a tenanted home on its rent and the rules around it:

• Rent increases are capped, at 2.3% for 2026 and 2.2% for 2027.
• A tenant paying well below market rent limits the investor's income for years, and the investor will price that in.
• In 2026, rent covers only part of the costs on most Lower Mainland condos at today's prices. See the investor tax stack calculator. The investor pool is small and price-sensitive.

The exceptions: a home with a long-term tenant paying close to market rent can appeal to investors. So can a house where only the suite is rented and the buyer will live upstairs. Buildings with several units are bought for their income.

Weigh the vacant-sale premium against the time, the one month's compensation, and the rent you give up.

Contract terms that protect you

• State the tenancy clearly. Give the rent, the deposit amounts, the start date, whether it's month-to-month or fixed term, and what's included. Provide a copy of the tenancy agreement.
• Choose "tenanted" or "vacant possession" deliberately. Vacant possession means the tenant must be out by completion. Don't promise it on a date the notice rules can't deliver.
• For vacant possession, set completion on or after the notice's effective date. That's the date the calculator gives. Consider a clause covering what happens if the tenant disputes the notice, or doesn't leave on time.
• Include the buyer's written request and a good-faith indemnity for the purchaser's use notice.
• Hand over the security and pet deposits. They move to the buyer as a credit on the statement of adjustments, with any interest owing. Rent for the month of completion is adjusted too.

Before you list: decisions that make the sale easier

• Don't sign a new fixed-term lease if you're planning to sell. A fixed term that runs past your intended completion date pushes back any purchaser's use notice to the end of the term. Most tenancies in BC now continue month-to-month after a fixed term ends anyway.
• Collect the paperwork now. You'll need the tenancy agreement, any addenda, the move-in condition inspection report, the deposit amounts and dates, and the rent history, including the date and amount of the last increase. Buyers and their lawyers will ask for all of it.
• For a strata unit, confirm you filed the Form K, the Notice of Tenant's Responsibilities, with the strata when the tenancy began. Check whether the strata has any bylaws that affect tenants, such as move-in and move-out fees or elevator booking. BC stratas generally can't restrict rentals any more, except in 55+ buildings, but their other bylaws still apply to tenants.
• Deal with repairs early. Outstanding maintenance issues sour the relationship and show badly in photos. Fixing them before you list helps on both counts.

Selling a house with a rented suite

When you live upstairs and rent out a basement or laneway suite, the tenancy rules apply to the suite exactly as they would to any other rental.

A buyer who will live in the main house and rent out the suite takes over the suite's tenancy, which often suits them. The rent helps them qualify, and many lenders count part of it.

A buyer who wants the suite for family, a close family member who will actually live there, can ask for a purchaser's use notice for the suite.

A buyer who wants the whole house for themselves, with no suite, can also ask. They must then genuinely use the suite as part of their own home for at least 12 months.

Say in the listing which of these a buyer can expect. It saves wasted showings.

If the tenant doesn't leave

Most tenants who receive a valid notice move out on time, especially with the compensation and the right to leave early.

If a tenant disputes the notice, the Residential Tenancy Branch holds a hearing. If a tenant stays past the effective date, the landlord has to apply for an order of possession, and then enforce it through the Supreme Court and a court bailiff. That takes weeks to months.

Meanwhile, your contract may promise the buyer vacant possession on a fixed date. That's why a clause dealing with a delayed or disputed notice, agreed in advance, is worth having. It might allow a completion extension, a daily per-diem payment, or other terms your lawyers negotiate.

Mutual agreements and "cash for keys"

A landlord and tenant can agree to end a tenancy on a date that suits both, using the Residential Tenancy Branch's Mutual Agreement to End a Tenancy form. Often the landlord pays the tenant to move. That's legal, and it's often the cleanest way to sell a home empty on your own timeline, before listing rather than after a firm sale.

The agreement must be genuinely voluntary. Pressure, threats, or cutting services to push a tenant out breaches the Act and can lead to compensation claims.

Put the payment amount, timing and move-out date in writing. Pay on move-out, with the keys handed back.

Taxes when you sell a rental

• A rental property: half the capital gain is taxable. Any depreciation you claimed comes back as fully taxable recapture. See the capital gains calculator, which also handles a home you lived in before renting out.
• A house with a rented suite that you live in is usually still your principal residence, as long as the suite is small relative to the home and you haven't claimed depreciation on it.
• Owned less than two years: BC's home flipping tax may also apply.
• Vacancy taxes: a home rented for at least six months of the year, in stays of 30 days or more, is exempt from BC's speculation and vacancy tax and Vancouver's Empty Homes Tax. If the home sits empty after the tenant leaves and before completion, check whether that's still true for the year of sale.

Mistakes we see

Serving a landlord's use notice in order to sell. It's bad faith, and can cost 12 months' rent.

Promising vacant possession on a completion date that falls before the notice's effective date.

Using an old two- or four-month notice form, or writing the notice yourself instead of generating it on the RTB portal.

Serving the notice before subjects are removed.

Entering for showings without 24 hours' written notice, or scheduling so many that the tenant can't live normally.

Forgetting to pay the one month's compensation, or to credit the deposits to the buyer.

Questions people ask us

Dan Marusin, PRECRenanza Realty Inc.
778-918-5990

Selling a rental?

Dan can compare what the home would sell for tenanted and vacant, plan showings with your tenant, and set a completion date that the notice rules can actually meet. Your calculator dates come along with the message.

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