Changes to Requirements for Serving Tenants Notice for Personal Use of Property

New RTA Rules on Serving Tenants Notice for Personal Use of Property

**Updated August 3rd, 2024**. The notice period required when serving a Notice to End Tenancy for Personal Occupancy when it is for the purpose of a purchaser requesting that a seller serve the notice has been reduced from a 4 month notice to a 3 month period, and the amount of time that tenants have to dispute a 3 month notice has been reduced from 30 days to 21 days.

The 4 month notice is still required for landlords where they (or an immediate family member) will be moving into the unit themselves, but in the case of a purchaser where they (or an immediate family member) will be moving into the unit, this notice period is now only 3 months notice. This change was made in order to account for mortgage requirements and commitments, in particular for first time home buyers.

If you own a tenanted rental property and are considering selling it or having yourself or an immediate family member move into it, your first step should be to review the rules set out in the Residential Tenancy Act (RTA) to ensure you understand what you are permitted to do and what your obligations are if serving a Notice to End Tenancy for Personal Occupancy. 

The use of a Notice to End Tenancy for Personal Occupancy requires the landlord to adhere to several rules, procedures and obligations set out by the RTA, and failing to do so can result in huge financial penalties and/or significant occupancy delays. 

There have been several amendments made to the RTA this year that directly pertain to the service of a Notice to End Tenancy for Personal Occupancy, many of which just came into effect this past week, and there are still a handful of others expected in the coming months, so even if you have reviewed this information in the past, an update is important as the changes are significant.

For this blog post, we are going to discuss the requirements and the obligations for serving a tenant a Notice to End Tenancy for Personal Occupancy, including highlighting the changes that are now in effect.  Because our client base is property owners of one or more individual rental properties, the scope of the discussion will be limited to the changes as they apply to this type of property owner.   There are other changes that apply to landlords of rental buildings or of strata properties with more than 5 strata lots where the landlord owns all of the strata lots, which will not be discussed in this post.  

A comprehensive guide that includes all of the rules and regulations in place for a Notice to End Tenancy for Personal Occupancy can be found on the Residential Tenancy Office website, and should be reviewed by any landlord that is considering serving one to ensure compliance. 

There are 2 main scenarios where our clients will consider serving the tenants a Notice to End Tenancy for Personal Occupancy.  These are as follows:

• The property has been sold, and the purchaser has requested that the seller serve the notice as they, or an immediate family member, intends to occupy the property.
• The property owner, or an immediate family member of the property owner, intends to move into the property themselves.

In both of these scenarios, further exploration is necessary prior to actually serving a notice to ensure that the reason for service is one that is permitted by the RTA, that the notice is not being served prematurely, and that the obligations imposed on the landlord are understood and fit with their timeline and needs. 

In the case of selling, it is not permissible to serve a tenant notice in order to empty the property for the purpose of listing it for sale.  When listing a tenanted property for sale, it must be listed and shown with the tenants in place.  The intention of the purchaser will determine what happens after the property has sold, which would include one of the following:

• A purchaser that does not have any immediate plans to move into the property, and that will take over as the landlord upon the closing of the sale.
• A purchaser that intends to move into the property themselves, or where an immediate family member of the purchaser or their spouse intends to move into the property for a period of at least 1 year, beginning on, or within a short, reasonable time frame after the move out date of the tenants.  In this case, the purchaser will request that the seller serve the tenants the Notice to End Tenancy for Personal Occupancy. 

In the case where the purchaser has requested that the seller serve the notice, it is important to ensure that the written request is obtained prior to serving it to tenants.  This request should include the following items:

• The request to serve the notice and the reason for the request.  It is important to ensure that the reason is valid, for example that it is not for the purchaser’s aunt or cousin to move in, or that the intention is not to move in for a period of less than one year.   
• The number of adults and the number of children that will occupy the property.  These are required fields when filling out the notice form on the RTB web portal.
• The name(s), current address and phone number of the purchaser (and in the case of an immediate family member occupying the property, their current address and phone number).  These are required fields when filling out the notice form on the RTB web portal.
• The move out date of the notice.  This should be reviewed to ensure that the service guidelines and their associated deemed received dates will allow for the notice to be deemed received in time for the move out date to be valid.  A mistake here could result in a delay of one month or more to the move out date, so it is important to ensure the requested move out date is possible prior to serving the notice. 

The RTB web portal also requires that the landlord upload a copy of the written request as well as a copy of the contract of purchase and sale in order to generate the notice to be served to the tenants, so it is advisable to have both of these prior to attempting to generate the notice. 

It is also important to note that all subjects of the sale must be removed before the notice is served, so this should be confirmed prior to serving the notice to tenants. 

The Recent Changes:

1. Notice Period – this has changed from a 2-month period to a 4 month period.   This means the notice must be deemed received at least 4 months prior to the move out date.  **as noted in the update at the top of the post, this notice requirement has now been reduced to a 3 month period in the case of a purchaser where they or an immediate family member plans to move into the property. The notice period will remain a 4 month period for landlords where they or an immediate family member plan to move into the property.
2. Occupancy Requirement – when serving a notice, the landlord or their spouse, or an immediate family member of the landlord or of the landlord’s spouse (whoever is named on the notice) must occupy the property for a period of at least 12 months with a move in date that is immediately or within a short reasonable time period after the tenants have moved out.  (the same applies to the purchaser, the purchaser’s spouse or an immediate family member of the purchaser or of the purchaser’s spouse in the case of a sale where the conditions have been removed and the purchaser has requested in writing that the seller serve a notice to the tenants).   This requirement was previously a 6-month occupancy period, making this a significant change.
3. Dispute Period – Tenants have up to 30 days to dispute a notice (previously was 15 days).  It is important to ensure notices are properly completed using only the mandatory required format for generating the notice, and that service dates (including deemed received dates) and service methods are correct.  Errors can all result in lengthy delays, and the extension to the dispute period can make delays even longer.   **as noted in the update at the top of the post, the dispute period for the updated 3 month notice is now 21 days. The dispute period for the 4 month notice will remain a 30 day period.
4. Process for Generating the Notice – The only acceptable method for generating a Notice to End Tenancy for Personal Occupancy is to use the Residential Tenancy Office portal.  This is mandatory, and any other form (including using one of the formerly acceptable RTO notices) will be considered invalid.   This means if you use one of the formerly acceptable notices, and the tenant disputes the notice, you will need to start over with a new notice.  If you are serving the notice as the result of a request in writing from a purchaser, this would likely mean a delay in the date that the purchaser is able to obtain vacant possession, leading to other potential problems. 

Acting in Bad Faith:

Acting in Bad faith in this case means providing an allowable reason for serving the notice to the tenants (as per the reasons permitted to use this notice as per the RTA) but not following through with the intended reason.  If a landlord serves a notice with the reason being that his/her/their daughter is moving into it for at least one year, and then that daughter never moves in, or moves in 6 months after the move date of the notice, they will likely be deemed as acting in bad faith and may be subject to a significant financial penalty if an arbitration is filed by the tenants. 

The penalty for acting in bad faith when serving a Notice to End Tenancy for Personal Occupancy is an amount equal to 1 years-worth of rent.  If your tenants are paying $2000/month in rent, the penalty assessed for losing an arbitration where it was found you acted in bad faith would be $24,000.  If the rent was $4000/month, this penalty would be $48,000.

It goes without saying that acting in bad faith is never advisable, and most property owners do act in good faith and follow through with their intentions.  Regardless, it is important to understand the risks of not acting in good faith, or of intending to act in good faith but having a change of plans after a notice has been served.   There are situations where you may serve a notice prematurely, later realizing that you are not able to follow through with your intended plans.  This can result in serious financial penalties, even when the initial intention was good, and as such, understanding these penalties will ensure that you take the time to ensure your plans are concrete and that you are able to follow through with them before serving a notice.

Other Important Considerations

• An immediate family member is limited to either a son, daughter, mother or father of the landlord or the landlord’s spouse.  Sisters, brothers, aunts, uncles, nieces, nephews and grandparents are not considered immediate family members for the purposes of serving a 4 Month Notice to End Tenancy for Personal Occupancy.
• There is a compensation requirement in place as part of serving a Notice to End Tenancy for Personal Occupancy.  Currently, this amount is set at an amount equal to one month’s rent.  This compensation amount is likely to increase in the coming months as it is in one of the items being addressed in the final phase of overall changes to the RTA that are occurring this year.
• Deemed received means the date the tenant is considered to have received the notice.  For Example, Serving a 4 month notice on January 31^st for a move out date of May 31^st will only be valid for a May 31^st move out if you were able to serve it to the tenant in person (as this is the only method of service where the notice is deemed to be received by the tenant immediately).  All other forms of service require either 3 days or 5 days (depending on the method of service).  It is important to allow for up to 5 days prior to the desired date you wish the notice to be deemed received to ensure it will be valid for the desired possession date.  For example, a 4 month notice with a move out date of May 31^st should be served by January 26^th (or, if January 26^th is non-business day, on the last business day before January 26^th). 

The bottom line is, while a sense of urgency is required where deadlines are concerned, never rush into serving a Notice to End Tenancy for Personal Occupancy.  When considering using the property for your own use or for the use of an immediate family member, take the time to make sure you have concrete plans that you will be able to commit to first.  When serving a notice at the request of a purchaser, confirm that all of the subjects to the sale have been removed, and that all of the required documents and information are in order.  Take a few moments to review that information to ensure that the reason for the notice is valid and that the service dates allow for the notice to be deemed received in time to meet the purchaser’s expectations.   

An experienced Property Manager can be a huge asset when it comes to navigating the process of serving a Notice to End Tenancy to your tenants.  At Lanterna Property Management, we are committed to monitoring changes to the Residential Tenancy Act and to adjust our procedures to adapt to new rules or requirements as they occur.  Additionally, we are very experienced in working with tenants during a sale or when a Notice to End Tenancy for Personal use is required, which can help in maintaining a positive landlord/tenant relationship during what is typically a highly stressful time. 

Contact us today to inquire about how we can help with the management of your property or with finding your next set of tenants.