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Legal Implications of Selling a Property That Is Currently Occupied by a Tenant (Part One)

By Kormans LLP

Imagine you’re a homeowner of an investment property currently occupied by a tenant (the “Tenant”). You decide to list the property for sale and go as far as signing a firm Agreement of Purchase and Sale (the “APS”) with a purchaser (the “Purchaser”). The APS calls for you to provide vacant possession of the property to the Purchaser on the closing date of the transaction.

 

The APS may even contain a clause that upon the deal becoming firm and unconditional a notice to vacate shall be provided to the Tenant asking them to vacate the premises on or prior to the closing date, as the Purchaser requires the possession of the property for use as their own principal place of residence and/or for the use as a principal place of residence of a blood-relation.

 

You send said notice to the Tenant once the deal becomes firm and unconditional…. only to find out that the Tenant refuses to vacate. Where do you go from here?????

 

This is a problem that is becoming more prevalent in recent times.

 

As a homeowner and a landlord, it is VERY important that prior to listing a property for sale that is occupied by a tenant, and even more importantly prior to signing an APS for the sale of the property occupied by a tenant, you go over the terms of your lease agreement with your real estate lawyer to ensure that you are within your legal rights to ask your tenant to vacate the premises in such cases.

 

The Residential Tenancies Act of Ontario, along with the applicable notice forms from the Landlord and Tenant Board should be reviewed to ensure that adequate notice timelines and procedures are followed. Otherwise, you could find yourself in a very costly and lengthy legal fiasco!!!!

 

Be on the lookout for a future blog post which will provide further insight on the various situations landlords find themselves - when they have entered into a firm APS to sell their property with vacant possession but their tenant refuses to vacate.

 

Please feel free to contact one of our lawyers should you have questions about this topic.

 

 

 

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 Taimoor Qureshi is an Associate Lawyer at Kormans LLP. You can reach Taimoor here: tqureshi@kormans.ca.

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