Tenants in the house you plan to replace: BC's rules for ending a tenancy to demolish

Some of the Vancouver lots we look at have tenants in them. The owner moved out years ago, rented the house or the suite, and is now weighing whether to replace it with a multiplex. When the tenancy is left out of the plan, the schedule is usually the first thing to slip.

B.C.'s rules on ending a tenancy for demolition set the order of events. Below is what they require and how we plan around them.

Permits come before notice

Section 49(6) of the Residential Tenancy Act lets a landlord end a tenancy to demolish a rental unit if two conditions are met. The landlord has all the necessary permits and approvals required by law. And the landlord intends, in good faith, to demolish the unit.

The Residential Tenancy Branch's policy guideline on this section explains that permits and approvals can include demolition, building or electrical permits issued by a municipal or provincial authority. It also states that the permits must have been valid at the time the notice was given. If the tenant disputes the notice, the landlord has to produce them.

The notice comes after the permit. On a multiplex, that puts the four-month notice period between permit issuance and the start of demolition.

The permits must cover the work that requires the unit to be empty. The guideline notes that a landlord does not need every permit for the full scope of the project, but must have the ones for the work that needs vacancy. In practice, for a house coming down to make way for a fourplex, that means the demolition permit and whatever else the city requires before it will issue one. A hazardous materials survey is also required before demolition, which we cover in the hazardous materials survey before demolition.

The notice and the compensation

The form is the Four Month Notice to End Tenancy for Demolition or Conversion of a Rental Unit (RTB-29). The notice period is four months.

The tenant receives compensation equal to one month's rent under the tenancy agreement. The tenant has 30 days to dispute the notice with the Residential Tenancy Branch.

The form itself tells the tenant how. They can file an Application for Dispute Resolution online, at a Service BC office, or at the Residential Tenancy Branch office in Burnaby. If they do not apply within 30 days, the form states that they are presumed to accept that the tenancy is ending and must move out by the effective date of the notice.

A dispute puts the permits and the owner's intention in front of an arbitrator. An owner with the permit in hand, financing arranged and a demolition contractor booked can show both.

Demolition, in the guideline's words, means the complete and irreversible destruction of the rental unit. Usually that means the building comes down, which is the case on almost every multiplex site.

Good faith and the 12-month penalty

Good faith is a legal test with a history. The guideline cites the B.C. Supreme Court in Gichuru v Palmar Properties Ltd. (2011): good faith requires an honest intention with no dishonest motive. When a tenant raises a dishonest motive, the burden is on the landlord to show they are acting in good faith.

The consequence of not following through is set out as well. If a landlord ends a tenancy for demolition and does not accomplish the demolition within a reasonable period after the effective date of the notice, the tenant may apply for compensation under section 51 of the Act. Policy Guideline 50 states that, except in extenuating circumstances, a landlord who cannot prove they met the conditions must pay the tenant an amount equal to 12 months' rent.

What counts as a reasonable period depends on the building. The same guideline notes that a simple demolition of a wood-frame single-family house may take only days, while factors such as asbestos removal or a city requirement to take the building apart for recycling can extend it. This is why we advise against giving notice on the expectation of a permit, or early in a project whose financing is not yet settled. If the project stalls after the tenants leave, the owner may owe a year of rent to each of them.

No right of first refusal

When a tenancy ends for renovation in a building with five or more rental units, the tenant can have a right to return. Demolition is treated differently. The guideline states that where a tenancy ends under section 49(6)(a), the tenant has no right of first refusal for the rental unit.

An owner can still choose to offer a former tenant a home in the new building, and some do.

How this changes the project schedule

For a multiplex in Vancouver, Burnaby or Richmond, the sequence usually runs like this: feasibility, design, permit application, permit review, permit issuance, then notice, then four months, then demolition. We walk through the full sequence in from single-family lot to fourplex: the timeline.

Two things follow from that order.

• The tenancy normally continues through design and permitting. The rent keeps coming in while the city reviews the drawings, which helps the owner carry the property during that period.
• Construction cannot start until at least four months after the permit is issued. Construction financing, the demolition contractor and the first trades should be booked around that date.

If the owner is also living on the property, their own move is a separate plan, covered in where to live during redevelopment.

Talking to tenants before the formal notice

The law sets the formal steps. The conversation around them is up to the owner, and it affects how the months before demolition go.

Tenants who hear about a redevelopment through a sign on the lawn or a surveyor in the yard tend to assume the worst. Tenants who hear it from the owner, with a rough timeline and a clear statement that formal notice will follow the permit, can start looking for a new home on their own schedule. Some leave before notice is ever given, which ends the tenancy by the tenant's choice.

Be accurate in those conversations. Do not promise a date you cannot control, since permit review times vary by city and by application. Say what you know, and update them when the permit is issued.

What we suggest landowners do early

• Confirm the tenancy terms: who the tenants are, the rent, and whether there is a fixed-term lease with an end date.
• Keep rent records and the tenancy agreement where you can find them. The compensation is calculated from the rent under that agreement.
• Tell tenants about the plan early, in plain language, even though formal notice has to wait for the permit. People plan better with more warning.
• Check whether your city has its own policies for tenants when rental housing is redeveloped. The Residential Tenancy Branch's guideline notes that local governments may have additional policies and bylaws, enforced by the municipality.
• Get legal advice before giving notice if the tenancy has any unusual terms.

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