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There are several situations wherein the need for possession on a tenancy basis can arise.
There are several situations wherein the need for possession on a tenancy basis can arise.

May 02, 2025 | CREB

Tenancy-at-will: What you need to know

Tenancy-at-will is when a buyer can move into a property without first paying for it. There are several situations wherein the need for possession on a tenancy basis can arise. 

One example is that the mortgage funds cannot be drawn and as such, the cash to close on the home cannot be provided to the seller in time for closing.

In cases like this, tenancy allows the buyers to take possession and move in prior to the seller receiving the closing funds. The standard real estate contract in Alberta foresees this type of tenancy and sets out some of the rules around it. 

What do you need to get tenancy?

In Alberta, to secure tenancy, the buyer’s lawyer will have to confirm the following with the seller’s lawyer:

Insurance is in place

A fully executed transfer back (transferring title back to the sellers) is in place

The mortgage is unconditional and fully executed

The buyer’s lawyer has the rest of the non-mortgage money needed to close; and lastly

A tenancy agreement is signed by the buyer

Why would a buyer’s lawyer not be able to get the mortgage funds to the seller?

There are several reasons why a buyer’s lawyer could not get mortgage funds to the seller’s lawyer. The following examples are broken down into buyers’ fault and seller’s fault. Tenancy is usually a given when closing is delayed due to the seller’s fault. When the delays are caused by the buyers, the seller has the option to refuse to give possession on a tenancy basis.

Tenancy when the seller causes delays:

Failure to provide an up-to-date real property report with compliance

It is an estate sale and seller cannot provide title

There are dower rights issues

Seller is not able to sign paperwork

Tenancy when buyers cause delays:

There is no mortgage in place

There are conditions outstanding on mortgage

Buyer is not able to sign paperwork

Buyer cannot access their non-mortgage funds

What are the standard terms of tenancy at will?

There are three main terms of these agreements. Of course, there are other terms, however these are the tenancy-at-will terms most asked about. These terms are:

1. Interest is payable (prime plus 3% if buyer’s fault OR buyer’s mortgage rate at the buyer’s mortgage amount if the seller is at fault.)

2. The sellers can evict the buyers with 24 hours prior notice

3. The buyers will return title if the sellers are not paid, at the buyer’s cost.

For further assistance, call Kahane Law Office at 403-225-8810 to speak with one of our experienced real estate lawyers to understand tenancy at will situations and how best to avoid it.

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