Buying Or Selling A Rental Property-- Frenquesly Asked Questions


Source : http://landlordselfhelp.com/frequently-asked-questions/?faq-category=selling-a-property


This article is intended to help landlords better understand their rights and responsibilities. It is not intended as legal advice but rather as general information.

source : http://landlordselfhelp.com/frequently-asked-questions/?faq-category=selling-a-property



Is a landlord allowed to terminate a tenancy agreement when a property is sold?


 While case precedents enabled landlords to terminate tenancy agreements on the basis of a purchaser's need to occupy the property in the past, the procedure for termination and provisions for access were not formalized until the Tenant Protection Act was enacted in June 1998. The Residential Tenancies Act continues this practice and recognizes an additional need. Once the landlord has an executed agreement of purchase and sale, the landlord may issue a notice of termination on behalf of the purchaser as his/her agent. The law clearly defines the reason for which a tenancy may be terminated when a property is sold, namely, for the purchaser's own use.


What does "purchaser's own use" mean?


The reason for termination is similar to landlord's own use and it means that if the premises are required for residential occupation by the purchaser; the purchaser’s spouse; a child or parent of the purchaser or the purchaser’s spouse; or a person who provides or will provide care services to the purchaser, the purchaser’s spouse, or a child or parent of the purchaser or the purchaser’s spouse, if the person receiving the care services resides or will reside in the building where the rental unit is located, a notice may be given. The purchaser will be required to provide an affidavit (if they are pursuing the own use application) which states their intention of residing in the rental unit.


Can a notice be given if the purchaser plans to live in the house?


The Residential Tenancies Act recognizes the purchaser's intent to occupy a rental unit when a rental property is sold and accepts this as a valid reason for termination of a tenancy under certain circumstances:


§ the property must contain three or fewer residential units;


§ the landlord/vendor has entered into an Agreement of Purchase and Sale to sell the residential complex; and


§ the purchaser must, in good faith, require possession of the complex or a unit for their own use .


The purchaser wants to occupy the premises, what can she do?


If there is a written fixed term tenancy (lease), the purchaser must honour that agreement as the tenant is entitled to continue the tenancy until the expiration of that agreement, unless agreed otherwise. The purchaser can ask if the tenant is willing to terminate early and, if so, enter into an Agreement to Terminate a Tenancy (Form N11).



What if the purchaser does not intend to occupy the premises but wants to find his own tenants?


The purchaser would not have a valid reason to terminate the tenancy. The tenancy would continue under the same terms and conditions as originally established by the landlord/vendor unless the purchaser intended to occupy the premises himself or required the premises for the occupation of his spouse or a child or parent of one of them.



I would like to purchase a property so I can move in, but it currently occupied by tenants. How can I evict the tenants so I can move in?


You first need to determine whether or not the existing tenancies are covered under the Residential Tenancies Act. If the tenants have their own kitchen and bathroom or have to share with other tenants, they are then protected by the Act which includes strict rules for ending a tenancy. If they are covered by the Act, as a purchaser, the current landlord can serve form N12 which is a 60 days’ notice for Purchaser’s Own Use on a month to month tenant. If the tenants have a fixed term lease, the N12 notice cannot be served until the end of the term.


If the tenants are required to share a kitchen or bathroom with the present owner, (or their child, spouse or parent) and that person lives in the property as their primary residence, they would not be protected by the Act. If they are not covered by the Act because of a current shared living arrangement, this would give you more flexibility in terminating the tenancy.


When selling a rental property, how can I ensure the tenant will let the realtor show the house to potential buyers?

The Residential Tenancies Act has established specific guidelines for entering a rental unit to show the premises to a potential purchaser. The Residential Tenancies Act allows the landlord, a broker or a salesperson registered under the Real Estate and Business Brokers Act, 2002 to enter a rental unit to allow a potential purchaser to view the rental unit after giving the tenant written notice at least 24 hours before the time of entry. The notice must specify the reason for entry; the day of entry; and a time of entry, which must be between the hours of 8:00 a.m. and 8:00 p.m. You must also provide your real estate agent with written authorization to show the property. As long as proper notice has been given, the tenant does not have the right to refuse entry.


Does the landlord have to attend with the potential purchaser?

The Residential Tenancies Act, section 27(2), provides that the landlord is not required to be present during the showing as long as a) the showing is conducted by a broker or salesperson registered under the Real Estate and Business Brokers Act, 2002 and b) the landlord has provided written authorization for the broker or salesperson to show the rental unit.


What notice do I have to provide to my tenant when I /or my agent intend to show the unit to a prospective buyer?


You must give 24-hour written notice of entry to the tenant. The notice of entry may be delivered by: handing it to the tenant or an apparently adult person on the tenant’s premises; placing it in the tenant’s mail box; placing it where mail is ordinarily deliver; sliding it under the tenant’s door; sending it by facsimile to the residence or place of business; sending it by courier or mail with additional time added or posting it on the tenant’s door.(Note: Only the notice of entry may be posted on the door. Any other document that must be served on a tenant cannot be delivered in this manner.)



We are selling our rental property and the mortgagee needs to inspect it. How do we give notice of entry for this reason?


According to section 27 (1), the landlord has the right to enter the rented premises to allow a potential mortgagee or insurer of the property to view the rental unit. The notice provisions for entering the tenant’s rental unit for this reason are 24-hour written notice that specifies the reason for entry, the day of entry and a time of entry between the hours of 8 a.m. and 8 p.m.


I sold the rental property and the required notice was given for purchaser’s own use. Is the tenant allowed to vacate early?


Once a notice for the purchaser’s own use has been issued, the tenant may give a notice to vacate early. The Residential Tenancies Act requires the tenant to give at least 10 days’ notice in an N9 form which may be given at any time after receiving the purchaser’s own use notice.


 

The lease ended and we plan to sell the house. We already gave our tenants 60 days’ notice to vacate. What is the next step?


Planning to sell the house is not a valid reason to serve the tenants a notice to leave. You can only serve them a notice of termination once you have signed an Agreement of Purchase and Sale and the purchaser plans to move in to the house. At that point you would serve the tenants with a Form N12 giving them 60 days to vacate and the notice has to terminate on the last day of the rental period.


 Can we give our tenants notice to vacate before we put house up for sale? There is no lease and repairs are needed before taking pictures of the house and putting it on the market.


If your plan is to sell the house there is not a notice you can serve the tenants now before putting the house on the market. You can only give them notice to leave once you have a Purchase and Sale Agreement signed and the purchaser is planning to live there. The only thing you can try is asking them if they would be willing to move out so that you can do the repairs in order to sell. If they agree to move out then you should have them sign an agreement to terminate the tenancy which would be Form N11. You can obtain this form from the Landlord and Tenant Board’s website at www.sjto.gov.on.ca/ltb/forms/.


 

What kind of notice do I need to give to my tenant if I am planning to sell my rental property?


If you plan on selling the property you would just inform the tenant that you are going to sell the rental property. There is not a notice that you can serve the tenant to vacate for this reason until the property is actually sold. Once you have signed an Agreement of Purchase and Sale and the buyer plans to move in to the property, provided the property contains less than three units you could then serve notice to the tenant to leave for the purchaser to move in. In this case a Form N12 has to be given to the tenants and it would be a 60 days’ notice.


 

I have rented to the same family for four years and I must now sell the property. How do I end their tenancy?


In this situation the first thing you should try is to talk to your tenants about your plans for the house and ask them if they are willing to move out on their own. If they agree to move out you should have them sign an Agreement to Terminate the Tenancy (Form N11). If they do not agree to move out, you will not be able to serve them with a notice of termination, however you can put the house up for sale. You can only give notice to the tenants once an Agreement of Purchase and Sale has been signed and the new owner requires the house for their own personal use. At that point you can serve the Form N12 on behalf of the purchaser.

 

I have given the required notice to show the rental unit and the tenant is not co-operating, what can I do about this?


The Residential Tenancies Act gives landlords the right to show the rental unit to prospective purchasers on 24 hours’ written notice between the hours of 8 am and 8 pm. If the required notice has been given and the tenant refuses entry, contact the Rental Housing Enforcement Unit so they can intervene. RHEU can be contacted at 416-585-7214 or Toll Free 1-888-772-9277.


 Is the landlord allowed to terminate a tenancy agreement when a rental property is sold?


You can only serve a notice to the tenants once an Agreement of Purchase and Sale has been signed and the purchaser requires possession of the unit to move in. At that point you would issue the tenants a notice of termination on behalf of the purchaser. The form required for this reason is a Form N12 with 60 days’ notice and you can obtain it from the Landlord and Tenant Board’s website at www.sjto.gov.on.ca/ltb/forms/. Please note that if the property has more than three units, the termination procedures are different than above.


 I am selling my rental property this fall, how do I let my tenant know that will not renew her lease?


You do not have to renew the lease with the tenant and there is not a standard form to inform her that you do not wish to renew the lease. However, she does not have to move out at the end of the lease as her lease renews automatically on a month to month basis so she can stay until there is a valid reason to terminate the tenancy. If you are selling the property, you will have to do so with the tenants in possession. You can serve a notice of termination of the tenancy once you have signed an Agreement of Purchase and Sale and the purchaser intends to occupy the unit. At that point you would serve the tenant with a Form N12 giving them 60 days’ notice to leave at the end of the term or rental period. The forms can be obtained from the Landlord and Tenant Board’s website at www.sjto.gov.on.ca/ltb/forms/.


I believe the tenant does not have to move if I sell the house. Is this correct?


Many landlords believe that a tenant can be asked to vacate their rental unit when a property is listed for sale. This is not true. If a property is simply being listed for sale the landlord does not have the right to terminate a tenancy agreement. In fact, if the property is sold and the purchaser does not require the premises for his or her occupation, or the occupation of an immediate family member as defined in the Residential Tenancies Act, the tenant has the right to remain in possession.


Can the new landlord increase the current tenants’ rent?

When you purchase a property with tenants in possession you assume whatever agreement they have in place with the previous owner. Therefore, when you take over as the new owner you are not allowed to increase the rent unless it’s by the allowable guideline and if the tenants have not had an increase in the past twelve months. To increase the rent, you must give the tenants a 90-day notice on a prescribed form which is a Form N1. Please check the rent increase guideline for the maximum a landlord can increase each year:

 

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