The provincial government says that after receiving feedback from “industry stakeholders,” the newly changed personal use eviction notice period has been walked back from four months to three months.
In a statement released Thursday, the Ministry of Housing says it is amending the notice period to help would-be first-time homebuyers, while “ensuring that tenants have more than two months notice to find new housing.”
“Since the amendments came into force, government has listened to feedback from industry stakeholders that a four-month notice period could prevent first-time buyers from purchasing a tenanted property, particularly for those under Canada Mortgage and Housing Corporation (CMHC) programs, which require the property to be vacant at possession,” the ministry said.
“In addition, a four-month notice period may not align with the purchasers’ mortgage commitment, which could expire prior to the closing date. There is a CHMC requirement that purchasers with insured mortgages must take possession upon closing, which requires vacancy of the property. The extended notice period could have an impact on this requirement and potentially disqualify them from financing,” it continued.
“In response to this feedback, government is taking action by amending the regulation to allow a notice period of three months and dispute period of 21 days for when a landlord issues a notice to end tenancy on behalf of the purchaser. The new notice period will be effective Aug. 21, 2024.”
Speaking to 1130 NewsRadio, Vancouver Realtor Steve Saretsky said that the updated rules are “smart.”
“Clearly they put a policy in place without any consultation from the industry, which is a bit odd,” he said. “I think it was a much-needed change.”
Saretsky explained that the four-month notice period affected homebuyers with bank loans.
“Banks will typically do a 120-day mortgage financing commitment, so, if you’re giving notice, let’s say I give you notice today, the clock starts ticking September 1.
“So, that’s basically almost a five-month wait time until you can get vacant possession as a homebuyer. No bank is going to give you that long of a mortgage commitment,” Saretsky said.
Four-month notice period didn’t factor in financing: Realtor
He explained the rules effectively asked a buyer to purchase a home without secured financing, making them take a huge risk.
“Let’s say you’re a first-time buyer, and you’re going through the Mortgage Insurance Program, you’re putting down less than 20 per cent — you’re not allowed to inherit the rent of tenants. That’s a federal regulation,” he explained.
“They want you to move into it, and if you need to move into it, you need to give the tenant the appropriate notice, which means you can’t close in that property for a minimum of four months, but again, no bank is going to give you a commitment longer than 120 days.
“So really, the regulations they brought in didn’t account for, or didn’t factor in, financing requirements.”
Saretsky believes three months’ notice is a “happy medium. He doesn’t think there was necessarily anything wrong with the previous two-month requirement, but “at least with the three month period, you can actually get financing commitment from banks.”
The province explains landlords who intend to personally move into their rental properties or have a close family member move in will still be required to give tenants four months’ notice if they are ending the tenancy.
“Tenants of these properties also still have 30 days to dispute landlord NTEs. The person moving into the home must occupy it for a minimum of 12 months and landlords who evict in bad faith could be ordered to pay the displaced tenant 12 months rent,” the ministry said.
–With files from Renee Bernard