Tenants come with the house! It's the law.

YES!!! You found a house you love!  It has tenants in it... but that's cool, you'll just kick them out right?  *insert record screech here* because what you're planning is probably totally illegal.

A Tenancy Agreement supersedes a Purchase Agreement.  Meaning that the Tenants are not legally impacted by the change in ownership, they simply get a new Landlord.  Buyers cannot move into the property until proper actions are taken and Sellers... well you best be careful about being engaged in two contracts for one property that may not jive.  That's a perfect recipe for getting yourself sued.  Here is what you need to know:

Think of ownership and possession as two different things.  The Seller and the Tenant are engaged in a contract for the Tenant's possession (or use) of the property.  This could be a month-to-month or a fixed-term lease.  Regardless, the tenant has a contract to use the property and the Seller is obligated to provide this usage.  

So when a Buyer comes along, they are a secondary contract to the property.  They may own it, but not be granted possession if someone else already has that.  Basically speaking, a Seller cannot give possession to two different parties.  

The best thing to do when considering the purchase of a tenanted property is to make the agreement conditional to your review and approval of the Tenancy Agreement and Property Conditions Report.  

If the tenants have a fixed term lease... your options are: 

• Take ownership when the lease is up.  Have the Seller serve notice to the Tenants to vacate the property upon the expiry of their lease.  And then time your closing dates to follow.  This way you will receive an empty house ready for you to move in.
• Become a Landlord.  Take ownership of the property right away and then serve notice to the tenants to vacate upon the lease expiry.  You'll just have to wait it out.  But you can collect rent in the meantime.  MAKE SURE TO HAVE THE RENT DEPOSIT TRANSFERRED TO YOU from the Seller (in your purchase agreement) or you will be on the hook to return this to the Tenants out of your pocket.  Also, remember that it will be up to you to determine if and adjust for any damages.
• Attempt a mutual agreement to end the lease early.  A lease can be broken if both the Tenant and the Landlord agree in writing.  Neither party is obligated to do so, so it's common to give the Tenants a financial incentive to agree.

If the Tenants are on a month-to-month rental agreement... your options are similar just on a different timeline:  

The Tenant can be served a 2 month's notice to vacate the property for the Landlord's personal use.  This is the equivalent of 2 rental periods so if rent is paid on the 1st of each month, this notice will begin on the 1st day of the upcoming month.  Basically speaking it can take 60-90 days before the home is ready for your possession. Additionally, the Landlord must provide the Tenant with compensation equal to 1-month's rent upon serving notice.   Your options are:

• Take ownership when the tenancy is finished just as you would a lease expiry.  In order for the Seller to serve notice to the Tenant, the Buyer must provide written notice of their intent to personally occupy the property.
• Become a Landlord.  Take ownership of the property right away, provide notice yourself and pay the Tenant compensation out of your pocket.

Factoring in a Tenancy Agreement definitely adds a layer of complexity to your purchase process.  It has a financial and timeline impact.  If you are purchasing the property to be your home and not a rental investment, the best approach is usually to wait for the Seller to handle the tenancy and then move in afterwards.  Either way, hiring a Realtor who has lots of experience with the Residential Tenancy Act of British Columbia will be a HUGE asset to you.