What Happens When a Landlord Sells a Property in Ontario?

What Happens to Tenants When a Landlord Sells Property in Ontario

Revised May 2018

If a landlord sells a property, it is best if the landlord and tenant can handle it cooperatively. Unfortunately, conflicts often arise. A common reason is that the landlord will want to show the property to many potential buyers, which can be inconvenience for the tenant who wishes to live in property without interference of his or her reasonable enjoyment.

If you are a landlord or tenant, you will need to follow the rules set under the Residential Tenancies Act. Some basic highlights in this statute are provided here below.

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Landlord Rights

A landlord has the right to put the property up for sale at any time. However, if there is any fixed term tenancy agreement, then the sale cannot close until the end of term agreed unless the buyer agrees to assume the tenancy. If the landlord would like a sooner closing date, however, then he or she should be prepared to negotiate with the tenant. Otherwise, the tenant can stay there until the end of lease term.

With the appropriate notice provided by the landlord, 24 hours in advance, the tenant is obliged to make the property for a showing to a potential buyer. The time for showing the property needs to be between 8 a.m. and 8 p.m.. The tenant needs to secure his or her pets and can be at property during showings but doesn’t have to be. The tenant cannot insist that the home be shown only when he or she is present.

If the tenant denies or avoids showing the property for sale despite issuance of the landlord’s prior and proper notice, then that is considered a material breach of the agreement by the tenant. In the event that this occurs, the landlord has the right to proceed to evict the tenant. The landlord can also sue the tenant for damages in connection with the delay in selling the property as a result of the breach.

Similar to the rules about showing the property to potential buyers, the landlord or his or her realtor (agent) has the right to take the photos of the rental property. Again, 24 hours prior notice must be provided and the appointment time must be made between 8 a.m. and 8 p.m.. Prior to permitting entrance, the tenant can opt to put away personal items (e.g., photos, posters, sensitive documents) or any other items he or she does not want captured in the photos. The landlord or realtor can use the photos made to advertise the property in a flyer, on a website or for any other purpose. 

When the lease term is over, it automatically becomes a monthly tenancy. Any agreement to enter into a new lease is up to the discretion of the (new) landlord and the tenant.

Tenant Rights

As mentioned above, the tenant cannot be evicted because the landlord sells or wants to sell until and unless the lease has ended. The tenant must show the property and keep the place reasonably clean, but the landlord cannot require the tenant to clean it specifically because of a showing.

If the landlord sells the property before the end of lease then he or she must ensure that the buyer agrees to continue the existing rental agreement. The buyer, as a new landlord, must then comply with the agreement and cannot unlawfully force the tenant out before the end of the lease. The new landlord also must honour any tenant right to renew the lease – if the agreement provides this right.

Once the lease expires, the tenant must be given 60 days’ notice to vacate the property provided that a buyer has already unconditionally agreed to buy the home or if the buyer needs the home for themselves or their family.

If the landlord wishes to vacate the property before placing it on the real estate market and the tenant has a monthly rental agreement, then the landlord is obliged to wait and provide the proper notice to the tenant. For example, if the tenant’s rental term starts on the first day of month and ends on the last day of the month, and if notice is given in the middle of the month, then the rental agreement would not end until after two months pass plus the end of the half month.

It is illegal for a landlord to trick the tenant into leaving under false pretenses. For example, it is unlawful for a landlord to claim they are moving in and then, once the tenant leaves, the landlord doesn’t move in, but prepares the home for sale. In fact, the tenant can sue if this occurs, including for moving costs and higher rent paid at their new home. The Ontario Landlord and Tenant Board can also add a penalty as high as $25,000.

The landlord may wish to improve the home with a major repair or renovation before placing it on the market. If the repair or renovation requires a building permit, however, the work cannot be done unless the rental unit is empty. In such cases, with the proper 120 days notice, the landlord can terminate the tenancy after the notice period. The landlord should be aware that the tenant, with the proper notice, also has a right to move back when the work is done. Or, the landlord and tenant may agree to end the lease early.

Contact Epstein & Associates To Be Your Landlord Lawyer Today

If you are a landlord and wish to legally sell the property while you are renting it out, contact us at Epstein & Associates. A landlord lawyer in Newmarket, Barrie, Mississauga or Richmond Hill can help you with landlord and tenant disputes in Ontario. Contact us at 1-866-463-2266 to speak with a landlord lawyer.