What happens if I purchase a home that has a tenant?

By LegalMatters Staff • People sometimes want to purchase a home with a tenant since their rent will help pay the mortgage. But other buyers will want the house to themselves.

As a prospective buyer, you must know your legal responsibilities to the tenant if you buy the home.

“If you want the tenant to leave before you take possession, the steps that must be followed depend on the lease agreement they now enjoy,” says Edmonton real estate lawyer Sean Schaefer. “With a fixed-term lease – usually for a year – the lease remains valid and a new owner of the home must honour its terms until it expires. That means you could have a tenant for up to a year, whether you want them or not.”

If you do not want the lease renewed, the tenant must be given written notice of your intentions 90 days before it expires, he says

“A three-month notice period is also required with tenants on a month-to-month lease,” says Schaefer. “This notice period cannot be shortened, even by a few days, unless the tenant agrees.”

He explains that as the buyer, you must ask the present landlord, in writing, to provide the tenant with a written notice to vacate, then wait for the three-month notice period to end before you get full possession of the home.

“Legally breaking a lease may allow the homeowner to sell the property quicker,” says Schaefer. “However, homeowners must work with a real estate lawyer to ensure there are terms in the purchase agreement detailing the terms under which the tenant has agreed to vacate.”

He adds that in most cases, the existing landlord and tenant can come to a mutual agreement to end the lease early.

“By following the rules, homeowners and homebuyers in Alberta can navigate the process of buying and selling a property efficiently and respectfully,” says Schaefer.