Tips For Selling Your Tenant Occupied Condo
By Condo Culture
A few weeks ago, in our Savvy Sellers Checklist blog post we discussed the top things to do before you sell your condo. Included in that list, was considering your tenants if your condo is currently being used as an investment property. In this week's newsletter we explore this topic in more detail, looking at the legal rights and requirements of both tenants and landlords during a condo sale.
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Showings - In person and virtual showings can be a useful tool when selling your condo. An unattractive unit however has the potential to negatively impact the sale. If you decide to list your condo while it is still tenanted, you may have limited control on how the unit is cleaned and presented for listing photographs/videos or during showing appointments. Having open lines of communication with your tenant and offering to have the unit professionally cleaned may assist in the overall process and relationship.
While tenants are required to facilitate showing request, they are not required to leave the unit and must be provided 24 hrs notice prior to any appointments which have to take place between 8am - 8pm. Tenants who do not cooperate with reasonable showing appointments are at risk of breaching their tenancy agreement which can be grounds for eviction.
Honoring Lease Agreements - If your property is a rental with a fixed lease long term tenant, legally you will only be able to sell your unit at the end of the fixed term or if the new buyer agrees to assume the tenant. If a landlord wishes to close the property sooner, this must be negotiated with the tenant.
Retaining a Tenant - If the new purchaser will continue to rent to the existing tenant, the lease agreement should be included in the purchase and sale agreement. In keeping the tenant and the terms of the lease, the new landlord is unable to increase rent for 12 months since the time the rent was last increased, and Ontario rent increase guidelines must then be followed.
Evictions - In Ontario a tenant can only legally be evicted if the new buyer or a close family member intends to move into the property. When this happens, a N12 (Notice to End your Tenancy Because the Landlord, a Purchaser or a Family Member Requires the Rental Unit) must be provided and the tenant given a minimum of 60 days notice (from the first of the month) to vacate due to sale. Recent changes outlined in the Protecting Tenants and Strengthening Community Housing Act, 2020 also require that these types of ‘no fault’ evictions be compensated with one months rent. It is illegal and considered a ‘bad faith’ eviction for a new landlord to evict an existing tenant and not use the unit for the purpose stated on the eviction (e.g. to rent it out to another tenant for higher rent). If a landlord is found guilty of this, they can be liable to compensating the tenant up to 12 months of the last rent charged.