Selling a Rented Property in New Brunswick

Selling a rented property in New Brunswick does not end the tenancy. Under section 13 of the Residential Tenancies Act, when a landlord transfers the property, the buyer takes on all obligations of the tenancy and "is a landlord for all purposes of this Act." The government's own page puts it plainly: all the terms and conditions of a lease stay the same no matter who owns the property.

A sale is not a ground for ending a tenancy. A fixed-term lease keeps its end date and its rent. If you want a vacant property for buyers, you cannot get it by announcing the sale.

The buyer assumes all obligations with respect to the tenancy. After the transfer is properly notified, no action lies against you, the seller, for obligations that arise afterwards (section 13(7)). You stay liable for obligations that arose before the notice. Fix repair requests or open disputes before closing where you can.

Two points often surprise sellers:

• A mortgage is not a transfer for this purpose (section 13(9.1)). Taking out or discharging a mortgage does not trigger the notice.
• The same rent rules bind the buyer. The buyer cannot raise the rent right away: six months' written notice, the 3% cap and the once-per-12-months limit all still apply. See raising the rent in New Brunswick.

The notice is mandatory. The seller completes Form 8, called the notice of transfer, and serves it on both the tenant and the Tenant and Landlord Relations Office within seven days after the transfer of ownership (section 13(8) and section 12 of General Regulation 82-218).

1. Get Form 8 from the government's housing pages at gnb.ca.
2. Fill in the form after the sale closes, as the seven days run from the transfer.
3. Serve one copy on the tenant and one on the residential tenancies officer.
4. Keep proof of when and how you served them.

Failing to give the notice is a category B offence (section 28(1)), with a fine of $140 to $640. Ask your lawyer to put the Form 8 deadline on the closing checklist.

In New Brunswick the landlord does not hold the security deposit. It must be delivered to a residential tenancies officer within 15 days of receipt. So there is nothing for you to hand to the buyer at closing and nothing to refund to the tenant because of the sale.

Once the office receives the notice of transfer, it transfers all security deposits on file to the new owner. That is why a late or missing Form 8 causes real problems. For the full deposit process, see the landlord's security deposit guide.

You do not have to tell your tenants that you plan to sell, although the government calls it a courtesy to share it. The legal duty starts after the transfer, with Form 8.

Showings follow the entry rules. To show the unit to a prospective purchaser, you must give the tenant 24 hours' written notice (section 16(4)(a)). Non-emergency entry must fall on a day other than a Sunday or holiday, between 8 a.m. and 8 p.m. (section 16(6)). The tenant does not have to be home once proper notice is given. If a tenant blocks showings, see what to do when a tenant refuses entry.

The Act has no special "buyer's own use" form tied to a sale. The only no-fault routes are the listed reasons in section 24.12(1), such as the landlord, a spouse, a child or a parent occupying the premises for at least three consecutive months in good faith, and renovations approved first by the Tenant and Landlord Relations Office. Because the buyer is a landlord for all purposes of the Act, those same rules would apply to the buyer. The tenant can ask for a review of such a notice within 15 days, and the notice must state the reason.

• Do not promise the buyer vacant possession unless the tenant has agreed to leave or an officer has approved the end of the tenancy.
• Do not pressure the tenant to move out before closing. Only an officer or a judge can evict.
• Do not forget the notice to the tenant. The seller carries that duty, not the buyer.

To learn how eviction works in the province, read when a landlord wants to move back in.

This guide explains the rules in general terms; for a specific case, ask the tribunal or a licensed legal professional.