A B.C. homeowner whose property sale fell through because his tenants hadn't moved out has been ordered to pay his would-be purchaser almost $4,200 for the trouble.
Gregory Unger was set to sell his Campbell River home to Cody Jackman last spring until the buyer showed up and discovered Unger's tenants still living there, according to a decision by B.C.'s Civil Resolution Tribunal, which handles small claims disputes in the province.
"The property was not vacant on the day the purchase was to complete, so the purchase did not proceed," tribunal member Eric Regehr wrote.
Unger signed a sales contract on March 11, 2018 promising to have the property vacant by June 1. It's unclear what steps he took after that, or why his house was still occupied two months later – the decision only states that Unger had tenants who, "for reasons that are not explained," hadn't left.
The buyer gave Unger a few more days to uphold his end of the bargain, but the deal ultimately collapsed.
On the hook for legal fees, storage costs
The tribunal's decision suggests Unger was in arbitration with his tenants by that point, but Regehr found it was still fair for Jackman to call off the sale.
"Given that there was no guarantee that the respondent would be successful in that arbitration, the applicant was not prepared to wait further. I find that this was reasonable," he wrote.
In a decision released almost one year after the failed real estate transaction, Unger was ordered to pay Jackman $4,179, which covered legal fees, a wasted home inspection and the cost of a storage unit where the buyer had to store his belongings for two months.
Ending tenancies can be tricky
Under the Residential Tenancy Act, tenancies continue by default when a rental suite or rental property changes hands – meaning new owners can't just show up and kick people out without going through the proper channels.
The seller can't unilaterally end the tenancy leading up to the move-in date, either.
"The landlord cannot end a tenancy because they want to sell," the Ministry of Municipal Affairs and Housing told CTV News in an email.
What the seller can do is deliver two months' notice to their tenant if the buyer makes a written request asking them to do so. Otherwise, the new owner has to serve their own two months' notice after taking possession of the home.
In either scenario, the buyer can only terminate the tenancy "in good faith if they plan to occupy the unit themselves" or have a relative move in, the ministry said.
Anyone who finds themselves in a clash with their landlord or tenant can contact the Residential Tenancy Branch for information and help with dispute resolution.
