HOW TO SELL A HOUSE OCCUPIED BY A TENANT PROPERTY IN ONTARIO
When it comes to selling a tenanted property in Ontario, the first thing to know is that if your tenants are still within the first year of their lease, you have to honour the terms of their lease. It’s best to wait to list your property for sale until the end of their year lease or when they are on a month-to-month lease.
It’s important to note that all leases that continue beyond a year, by law, move to month-to-month even if you and your tenant have signed a subsequent one year lease.
GIVING NOTICE TO RENTERS OF INTENT TO SELL
When it comes to letting tenants know you’re selling, it’s always best to give them ample notice to get their ducks in a row, but no formal notice needs to be given until your property has actually sold.
When your tenanted property sells, if the buyers are planning to move in to the property, you are required to give your tenants 60 days notice from the first of the month that their tenancy will be ending. For instance, if your property sells on April 4th, the 60 days notice doesn’t take effect until May 1st, which means your closing date will be July 1st.
Once the tenanted property sells firm and you give notice to tenant to vacate due to sale, you will need to serve them with an N12 form which is the Notice to End Tenancy form.
If the buyers plan to use the property as an investment property themselves, they have to assume your tenants and the terms of their existing lease. The new owners are not allowed to increase the rent anymore than the established rent increase guideline which is currently 1.8% per year (2019).