The client
A newcomer made an offer on a $310,000 tenanted home in Dawson Creek, intending to end the existing month-to-month tenancy so a newly-landed grandparent could move in.
Purchase price
$310,000, Dawson Creek
Existing month-to-month tenant in place
Original plan
10% down, insured
Assumed vacant possession for a grandparent to occupy
Corrected structure
20% down, uninsured
Once vacant possession could not be guaranteed at closing
Additional cash required
$31,000
Contributed by the grandparent once the structure changed
The problem
Since British Columbia's July 2024 Residential Tenancy Act reforms, a purchaser can end an existing tenancy on three months' notice so a close family member can occupy the unit -- but only if the person moving in is the purchaser's own spouse, parent or child, or the parent or child of the purchaser's spouse. A grandparent is not on that list, in either direction. Ending a tenancy for a grandparent to move in is not a ground the notice covers at all, regardless of how genuine the intention is.
What the newcomer had assumed, and what actually applied
- ▸Assumed any close relative moving in would qualify the purchaser to end the tenancy -- the category is narrower than that, and grandparent is not on it
- ▸The tenant had done nothing wrong and had no obligation to leave voluntarily just because the property was changing hands
- ▸Without a valid ground to end the tenancy, the tenant's right to remain survived the sale entirely
The purchase itself was never in doubt. What had to change was the assumption that this file would close with the newcomer's grandparent walking into an empty house on possession day.
The numbers
Once the sitting tenancy was accepted as a fact of the deal, sizing the financing was ordinary arithmetic.
| Restructuring around the sitting tenant | Amount |
|---|---|
| Original down payment (10%, assumed vacant possession) | $31,000 |
| Corrected down payment (20%, tenant remains in place) | $62,000 |
| Additional cash required | $31,000 |
| Ratio check, informational only | Figure |
|---|---|
| Payment on the corrected $248,000 mortgage at the qualifying rate (7.10%), 25 years | $1,752/mo |
| Property tax | $210/mo |
| Heat (lender estimate) | $130/mo |
| Combined ratio | 28.3% |
This became an uninsured purchase once the down payment moved to 20%, so CMHC's ratio ceilings no longer apply directly; 28.3% is informational, and shows the corrected structure was comfortably affordable once insured-versus-uninsured financing was actually compared side by side.
The solution
A submortgage broker licensed under BC's mortgage-broker framework flagged the Purchaser's Use eligibility question before the offer's own possession date was finalized, not after.
First, confirmed directly which relatives actually fall inside the Purchaser's Use definition, and established that a grandparent moving in, on its own, gives the purchaser no ground to end the existing tenancy.
Second, restructured the offer around the tenant remaining in place, treating the purchase as an investment property for financing purposes rather than an owner-occupied purchase with assumed vacant possession.
Third, sourced the additional down payment needed at 20% from the grandparent's own funds, since the file could no longer rely on high-ratio insured financing built around an occupancy plan that wasn't actually available.
The outcome
The purchase closed with the tenancy intact, financed uninsured at 5.10% on the corrected 20%-down structure, with the grandparent's own funds covering the additional cash required.
Because this is an uninsured purchase, CMHC's 39% GDS and 44% TDS maximums do not apply directly; the 28.3% figure is informational only.
What to take from this file
- 01The Purchaser's Use notice only covers a narrow list of relatives: the purchaser's own spouse, parent or child, or their spouse's parent or child. A grandparent, grandchild or sibling is not on that list.
- 02A genuine intention to house a relative does not create a ground the Act does not provide. Confirm the specific relationship against the actual category list before relying on vacant possession.
- 03A sitting tenant with no valid ground to be removed keeps their tenancy through a sale. Price and structure the deal around that reality rather than an assumed possession date.
- 04An owner-occupied financing plan built on unconfirmed vacant possession can collapse late. Confirm the occupancy plan is actually achievable before pricing the mortgage around it.
Sources
Every regulatory figure in this file traces to one of these primary sources. Client details and anything that varies by lender are illustrative, as flagged below.
- ▸OSFI — Minimum qualifying rate for uninsured mortgages — the minimum qualifying rate — greater of contract rate + 2% or 5.25%.
- ▸Provincial/territorial mortgage-broker legislation fetched directly (bclaws.gov.bc.ca, legisquebec.gouv.qc.ca, fcaa.gov.sk.ca, web2.gov.mb.ca, nslegislature.ca, assembly.nl.ca) plus FCNB's own site for NB and CanLII's index for PE — see notes for per-province method — provincial mortgage regulators and licence titles.
- ▸Property Transfer Tax Act, RSBC 1996, c. 378, ss. 3(1) and 3.01(4) — BC's property transfer tax: 1% / 2% / 3% marginal brackets.
Illustrative in this file — lender-specific, not rules:
- ▸5.10% contract rate — rates move daily; not a quote.
- ▸the lender's own 20%-down requirement without confirmed vacant possession — individual lender policy on occupancy-contingent financing varies by institution, not a universal insurer rule.
Authority & provenance
How this case file was built
We publish the origin, the verification method and the reviewer for every case file, so you can judge how far to trust it before you rely on it with a client.
Where it comes from
Derived from files handled by Treadstone’s fulfillment desk and from scenarios contributed by partner brokerages. Names, employers, exact amounts and dates are changed so no client or file is identifiable.
Provenance: Composite — a pattern seen repeatedly on fulfilled files, not a single transaction.
What is verified
Every regulatory figure traces to a primary source listed above and was checked against it on the date shown. The arithmetic is recomputed by machine on every rebuild.
Anything that varies by lender is labelled illustrative rather than stated as a rule.
Who reviewed it
Reviewed for Canadian regulatory accuracy before publication, and re-checked whenever a cited rule changes.
Reviewed by: Nicholas Parson, Treadstone Associates — reviews every case file before publication.
This case file is professional reference material for licensed mortgage professionals. It is not advice to a borrower, and it is not a lender commitment. Insurer rules, qualifying rates and provincial taxes change — confirm the current position with the insurer, regulator or lender before you rely on any figure here in a live file.