Family evicted from townhouse awarded $27.7K to be paid by the buyer after sale falls through

A family of four in Surrey, B.C., was recently awarded $27,717 from the Residential Tenancy Branch (RTB) after they were evicted in April 2022 when the townhouse they were renting was sold in a deal that was never completed.

The would-be purchaser was ordered to pay compensation of 12 months rent, the customary penalty for wrongful eviction, even though they weren't able to complete the subject-free sale because their financing didn't come through. They also lost a $30,000 deposit.

The tenants, Marcia Rubio and Oscar Hierro, say they're happy with the arbitration award, but they would have preferred to stay in the townhouse, which was close to their children's school and was $450 less in rent than where they are now, farther away in Langley.

"We feel so frustrated," Rubio told CBC News.

"It's crazy out there. We are so scared, so scared because [as renters] we don't have any stability, any security."

Rubio says she has yet to hear from the purchasers, Humaira Bashir and Shammas Cheema.

Cheema, a Realtor who was added as a co-purchaser after the initial offer and therefore isn't named in the RTB decision, told CBC News he intends to appeal the decision.

Cheema said he had warned the seller their financing might not come together and that the seller should have let the tenants know.

"It is a very tricky situation because we already lost money," he said. "But at the end of the day, the court's decision will be respected."

Tenants had already moved out

The offer on the townhouse, according to the Residential Tenancy Branch decision, did not have any conditions on it, meaning the purchasers had to commit to the sale despite any financial or other concerns.

Cheema said the housing market was so hot those types of offers were de rigueur at the time. But then the market turned, and despite his initial confidence in the ability to finance the mortgage along with a co-buyer, he wasn't able to make it happen.

The deal collapsed at the 11th hour, according to Cheema and the RTB decision, and by then, the tenants had already moved out.

The townhouse that was for sale is in this complex in the Fleetwood area of Surrey, B.C. (Google Maps)

Rubio said her son's birthday was at the end of the month, and the family decided to move sooner in order to celebrate it without the stress of an impending move.

The decision says the onus to pay the fine is on the would-be buyer — because they requested the landlord issue the two months' notice to end the tenancy.

CBC News reached out to the seller, Prem Banwait, who was also the Realtor and landlord in the sale, but he refused to comment.

Documents filed as part of the case that were shared with CBC show Banwait kept $30,000 of the deposit and returned another $10,000 to the buyers after the sale was cancelled.

The decision says Banwait expected the sale to complete because "who would want to lose their deposit?"

Townhouse rented to new tenants

The townhouse was rented out shortly after the sale didn't go through.

The decision says the seller told the arbitrator he had to rent it again because, with no sale, he still had to pay his mortgage.

The tenants didn't know the sale had not gone through until a neighbour called to tell them their former home had been rented to new tenants, the decision says.

When CBC contacted the Realtor representing the buyers, Rizwan Khan, a colleague of Cheema's at Woodhouse Realty Group, he echoed Cheema's sentiments that the seller should have let the tenants know the deal fell apart and the buyers shouldn't be on the hook for the tenants' compensation.

"There's nothing that was done wrong," he told CBC News.

Ending tenancy 'a drastic step'

Rubio says she and her husband, Oscar Hierro, had been renting the townhouse in Fleetwood since 2019.

The RTB decision notes they were paying $2,301 per month for the three-bedroom, two-bathroom townhouse. The current tenants told CBC News they are paying $2,900.

Robert Patterson, a lawyer at the Tenant Resource and Advisory Centre, says B.C.'s tenancy laws are pretty clear that if someone issues a notice to end tenancy and then doesn't follow through on that, there are consequences.

Patterson said arbitrators at the Residential Tenancy Branch do have discretion to make exceptions when there are extenuating circumstances, but the decision makes it clear the purchasers didn't adequately explain why their financing didn't come together.

"Whenever we're talking about ending a tenancy, it's always a drastic step. It's always something that is going to have an incredible impact on the tenant," he said.

"A person issuing an eviction notice or causing one to be issued needs to be very sure that they have adequate grounds to do so and needs to know that they can follow through on that stated purpose."

For Rubio and her husband, who are now living farther from their children's school and paying nearly $500 more in rent each month, the consequences are clear.

Tired of the insecurities of the rental market in Metro Vancouver, she says the family is planning to move to Alberta.