When the time comes to sell your investment property, there are some legal considerations you’ll need to be aware of. Understanding your rights and responsibilities as the landlord can not only contribute to a smooth sales process for both you and your tenants, but it can also help you avoid potential penalties, delays or challenges that may occur.
Selling as a landlord may seem overwhelming, but with the right approach and communication, it can be as easy as any home sale. Here’s an overview of what you can expect when selling with tenants in Ontario.
Start With An Agent
Even without tenants, selling your property can come with its fair share of complexities. The best place to start is with an expert. Not only can an experienced real estate agent help you get the best possible price for your property, but they can also help you navigate the red tape and fine print of selling with tenants.
As an active team in Ontario’s vast real estate investment market, we work with landlords, tenants and buyers to ensure a smooth process for all parties involved. Learn more about our approach to selling here.
Rights & Obligations
During the sale of your property, both you and your tenants are entitled to a distinct set of legal rights and responsibilities. As a landlord in Ontario, it is your right to sell your property at any time for any reason. However, there are certain tenant protections and other obligations you’ll need to adhere to during the selling process.
It’s important to remember that tenant rights can vary by person. If you oversee multiple units within your property, each tenant will have their own unique protections based on their lease. That being said, if all of your tenants have been leasing long-term, there will be a fair amount of overlap.
When To Talk To Your Tenants
One common question landlords may ask when selling a property is “How early must I inform my tenants of my intent to sell?”. In Ontario, no formal notice is required until the building is actually sold. However, you should let your tenants know as soon as possible in case they are required to find new living arrangements. You’ll also need to work together when arranging inspections and showings, so opening up the lines of communication early is always a good idea.
Important Dates
The foremost thing you must know when selling a tenanted property is that if any tenants are within the first year of their lease, you must honour the terms of their agreement under the Ontario Landlord & Tenant Act. Should you go forward with selling, the new owners of the property may not evict the tenants within the duration of the lease.
When you sell, a prospective buyer’s intentions may become your responsibility. If the buyer intends to move into the property, you will likely be responsible for overseeing the eviction process before the possession date. In this case, if your tenants are renting on a month-to-month basis, you are required to give a minimum of 60 days’ notice before they must move out.
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Showings
One of the biggest challenges that can come with selling a tenanted property is coordinating showings. As a landlord, you are required to give a minimum of 24 hours’ notice to your tenant before each showing and are only legally entitled to show the property between 8 AM and 8 PM.
If you give the required notice, tenants must allow you to show the unit regardless of how convenient it is for them. However, they may be present during a showing if they wish. Tenants are also not required to alter or prepare their living space before a showing.
Buyer Factors
Depending on the timeline of your sale, your tenants may have some questions you are unable to answer just yet. After all, their future within the property is usually up to the buyer. In some cases, the buyer may wish to continue renting, or they may wish to move in themselves. It’s also common for banks to require buyers to take occupancy as part of their financing agreement.
If your tenants have questions about their rights, responsibilities or finding a new place to live – refer them to your real estate agent. Your agent can help them understand the ins and outs of the Ontario Landlord & Tenant Act, and even help them find their next home.
Preparing to sell your tenanted property? Get in touch to find out how our expert agents can help.
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