Buying or Selling a Home w/tenants
Thursday Jan 18th, 2024
Buying and selling a home is a big decision, when tenants are involved it’s complicated. Here are some things you should know whether you’re buying or selling or home with tenants.
Selling a home with tenants
In Ontario the home owner is legally permitted to sell a property with a tenant in it.
Working with the existing tenants is better for everyone. Being upfront with your intentions gives you both the opportunity to find solutions that work for everyone.
The tenants are legally obligated to let you show the space. You must give the tenants 24 hours advance notice of entry. The showing must be between 8am and 8pm and the tenants are allowed to be present during the showing. If you have a good working relationship often a tenant will be flexible and showing a property that has someone living in it is better than an empty space.
You cannot evict your tenant because you are selling your property, even if they have a month to month lease. That lease continues to be valid beyond the closing date. You can however ask your tenants to leave, but they do not have to oblige.
Purchasing a home with tenants
If you are purchasing a home with tenants, you assume the current tenants.
The only way you can evict the existing tenants is if you are planning to have a member of your family, or a caregiver takeover the space, otherwise the tenancy legally continues. Assuming you meet the requirements to evict the tenant you will need to give them 60 days notice. You would then be obligated to the tenants with a N21 (a notice of Eviction for Personal Use). As the new landlord you are required to give the tenants one month’s compensation before the termination date. If the compensation if not given, the N12 is void.
Regardless of how you want to handle an existing lease, it’s essential to carefully follow the Landlord and Tenant laws.
If you want to keep the existing tenants you simply abide by the current lease agreement.
If you are hoping to take over the space for other reasons you can make a financial offer that works for both you and the existing tenants, it is often referred to as “cash for keys”. If you come to agreement an N11 (Agreement to Terminate tenancy) should be signed.
Deciding whether or not to buy or sell a home is a huge decision, when tenants are involved it’s a bit more complicated. Please feel free to contact me in complete confidence. I’d be happy to help.
This information should not be relied on as legal advice, financial advice, or a definitive statement of the law in any jurisdiction. For such advice, please consult your own legal counsel or financial representative.