PEI Landlord Selling Property: What Notice Does the Tenant Get?

Listing for Sale Is Not a Ground for Termination

This is the point where most PEI landlords get tripped up: putting a rental property on the market does not give you the right to end the tenancy. Under the Residential Tenancy Act, the tenancy agreement survives marketing and even survives the sale itself — it transfers to the new owner on closing.

You cannot serve a notice to vacate simply because you've decided to sell.

When You Can Give Notice

The only sale-related ground for termination is purchaser personal use under Section 63, and it requires three things to be true simultaneously:

1. An agreement of purchase and sale has been entered into. A listing alone is not enough. The Act does not require the sale to close before notice is served.
2. For a residential property, there are fewer than three rental units. Section 63(2) provides a separate route for a condominium unit, subject to subsection (8).
3. The tenant receives a sworn affidavit from the purchaser confirming a good-faith intention to occupy the unit. The Act allows the purchaser or an eligible family member or care provider to occupy.

The agreement must be in place and the tenant must receive the affidavit with the notice. A notice without the required affidavit is not valid.

Notice Periods

The notice period depends on who's moving in:

• Purchaser occupying personally: 2 months, effective the day before rent is due
• Purchaser's family member occupying: 4 months, effective the day before rent is due

If you mail the notice, add 3 days for deemed receipt under Section 100.

Compensation

You must provide one month's rent plus reasonable moving expenses, or offer another rental unit acceptable to the tenant. The reasonable moving expenses are capped at the lesser of actual moving costs or one month's rent. Any compensation is due on or before the effective vacate date.

The Timing Challenge

Here's where it gets complicated in practice. The closing date on your purchase agreement and the notice period you must give the tenant operate on separate timelines. A 2-month notice period (plus mail deeming, plus rent-cycle alignment) means you might need to have the agreement signed 3+ months before the buyer expects to take possession.

If the closing date is too soon for the notice period to expire, you have a problem — either the buyer delays closing, or the tenancy stays in place and transfers to the new owner.

What Happens After the Sale

If the sale closes before the tenant leaves and no valid Section 63 notice was served, the new owner steps into the existing tenancy. They inherit the same lease terms, the same rent, and the same rent-control rules. They can only terminate on their own lawful grounds going forward.

Bad Faith Risk

If you serve a purchaser-use notice and the buyer doesn't actually move in — say they re-list the unit for rent instead — the former tenant can apply under Section 65 for a bad-faith determination. The Director may order payment of all or part of increased rent for a one-year period after vacating, reasonable out-of-pocket moving, storage, and similar expenses, a rent abatement, an administrative monetary penalty up to $10,000, or another appropriate order. The former tenant must apply within one year after vacating. Section 106 separately provides for a fine of up to $25,000 on summary conviction for a contravention of the Act.

The Ending a Tenancy in PEI guide covers the full Section 63 process, including a compensation tracker and a good-faith documentation log that helps protect against bad-faith claims after a purchaser-use termination.

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