How To Sell a Home with Problem Tenants in Calgary Alberta.
Having bad tenants who refuse to pay rent can seem like a nightmare for any landlord. But this nightmare took a different turn for homeowner Mary Atkins, whose tenants were none other than her sister and three nieces. When close relatives create havoc, how does one wiggle out of such a situation? Does the law support landlords in the Calgary area?
One Wednesday morning, we received a call from Mary, who lives in the Calgary Alberta. She called us frantically, hoping to sell her house as fast as she could. But why wasn’t she able to sell her house?
What was the problem?
Years ago, Mary’s mother wanted to buy this house, so Mary supported her financially and added her mom’s name to the title. The newly purchased home needed a lot of repairs, which Mary took care of, right before they moved in. Unfortunately, within a few months, the mother passed away and she wanted to sell the home. In the meanwhile, Mary’s sister needed a place to live in, so she moved into this house shortly thereafter.
The agreement they had was that the sister would live there and pay rent while they were preparing the house for sale. The rent would cover the mortgage, the house would appreciate in price over the months, and her sister would have a roof over her head. An absolute win-win situation for everyone, right? Buy a home, put down some money, rent it to cover the mortgage, and over time you have a nice chunk of equity for sale – What could go wrong? Isn’t this the strategy that most new landlords apply?
Unfortunately, it doesn’t always work out that way.
Mary thought she might not even sell the house right away because her sister needed her help. However, the sister didn’t intend to return the favor. She moved in along with her three adult daughters and agreed to switch the utilities to her name. Weeks and months rolled out into years – until it was three full years of occupancy and Mary hadn’t received any money for rent. Mary was owed many months of back rent. What’s more, there wasn’t even a dime put towards utilities! With more money being pumped back into the house, and the burden of maintaining a strained relationship, Mary decided to remove her sister and nieces in order to put the house up for sale. But having been used to living rent-free for so long, they became defensive and the situation got combative.
Mary took them to court to have them evicted. However because she didn’t follow the proper legal procedure, she wasn’t successful.
What is the legal perspective?
Calgary, AB area is one of the most pro-tenant jurisdictions in the entire Alberta. If you want to evict someone in Calgary, you will need to know the intricacies of the complex laws, or hire an attorney who does. The problem is that most landlords who own one or two properties don’t have the money to hire an attorney, as they are cash strapped from not receiving rent that was due to them. In this case what’s worse is that Mary’s sister and nieces were able to obtain free legal counsel to help them through the legal process.
How did it work out?
Mary saw our commercial on TV and heard our ad on the radio. She was skeptical at first but decided to call us to see her options. She spoke with Matt Altizer, our Acquisition Specialist, and within 7 minutes he was able to give her a cash offer that included buying the property with the problem tenants in it. After getting her questions answered Mary was happy with our offer.
The very next day, Matt scheduled a meeting at her address to assess and verify the condition of the house. Mary decided it would be best to not to be there at the meeting. Taken by surprise, the tenants were very defensive during this first home visit – knowing well that they would not be spared in being removed rightfully.
Since Mary led a busy life working for the Alberta government, she didn’t have a lot of spare time to sell her “rental” house fast. So Matt and Alberta Buyers helped her complete the paperwork and took care of every detail going forward.
What should you know?
The title work was pulled and the home was owned in tenants in entirety – which means the house didn’t have to pass through probate to be sold. The good news was that the deceased mother’s share of the house reverted to Mary at her time of death. The bad news, however, is that in Alberta, tenants have the first right of refusal to purchase any property they live in. This is called TOPA – Tenant Opportunity to Purchase Act. So if you own a rental home or property in Calgary Alberta., you must give your current tenants an opportunity to purchase the home for the same price as what the seller is offering the buyer. This is a complex legal process that if not followed properly can result in stiff penalties to the landlord. For more information on the process, please see here. This is a responsibility of the buyer, not the seller.
However, this happens to be one of the many “extra” services that Alberta Buyers provides when a landlord is selling a house with problem tenants in it. The tenants now became the headache of Alberta Buyers and not of the homeowner. Our landlord tenant attorney, at our cost, drafted the required TOPA documents and served (via a process server) the tenants with the papers. The tenants had 30 days to respond but they never did. On the 31st day we bought the house, with the problem tenants still in it, and paid off all the mortgages. Alberta Buyers paid for all attorney costs and closing costs. The seller no longer had to make payments for her house, her mortgage was paid off and she ended the 3-year nightmare overnight!
Do you have problem tenants, tenants who don’t pay rent or tenants that are family members? We can help. Call us for an offer in 7 minutes to sell your house in 7 days.