How you word the offer to purchase for an income property can decide if evicting tenants is a buyer or seller responsibility.
That could make the difference between moving in right away, or struggling to get vacant possession.
As an Ontario home buyer discovered, failing to cross the t’s and dot the i’s is a big deal when you are evicting tenants (Lees v Ahmadi et al, 2022 ONSC 1114).
The buyer asked for vacant possession of a rental unit, and the tenant’s belongings and debris to be moved out of a garage. But her plans to occupy the unit were crushed when the seller’s commitment to evicting tenants fell flat.
She asked the court to force the seller to uphold their agreement. The judge turned her down.
Why the APS Wording Counts
Here’s what happened.
How the agreement of purchase and sale (APS) was worded led to the buyer’s defeat in court.
- The APS correctly included the buyer’s directions that the seller ensure the garage was empty.
- The seller was responsible for serving notice on the buyer’s behalf about the evictions.
- While vacant and empty possession clauses were added, the buyer failed to include specific deadlines.
- Further, she set the contract’s completion date to coincide with vacant possession.
- But the closing date the buyer and seller agreed on didn’t allow sufficient time for vacant possession, the 60 days written notice legally required in Ontario when evicting tenants.
With no firm deadlines in writing, and insufficient notice for evicting tenants, the contract was doomed to fail. The seller simply argued he couldn’t deliver on the APS as signed, and wasn’t responsible for evicting tenants, just for notifying them of the buyer’s eviction plans.
Evicting Tenants in Ontario
Buying a rental property doesn’t mean you can just move in, and evict everyone in sight. Not that we suspected you would. Changing ownership has no impact on a tenant’s lease terms and conditions.
You got it. Existing tenants in an Ontario income property, secondary suite, or granny flat have rights under the province’s Residential Tenancies Act. They, and you, can appeal decisions to the Ontario Landlord and Tenant Board.
You may just have to keep the tenant, or negotiate a settlement for the inconvenience. The independent tribunal’s decisions are binding, so stay alert.
Owning a rental property in Ontario.
What Home Buyers Should Know Before Evicting Tenants
What is the Fastest You Can Evict a Tenant?
The fastest way you may evict tenants is to move into a rental property yourself, or lease the secondary suite to an immediate family member. Request vacant possession in the terms and conditions of the agreement of purchase and sale. Give a clear deadline in the agreement for when the tenant and their possessions should be gone. That makes evicting tenants the seller’s responsibility.
Documents you need for buying a home for rental income or to live in.
What is the Process for Eviction of Tenants?
Regardless of who does it, evicting tenants triggers a written notice requirement. Tenants are entitled to 60 days advance notice in writing.
Evicting tenants gets more complicated if you plan to make major renovations and re-rent a secondary suite or income property. In that case, tenants have a right to 120 days written notice, and to exercise the right to move back in.
Why you need a lawyer for buying a rental property in Ontario.
Tenants’ right of first refusal requires they notify you of their intentions before they move out. That way, you know whether to expect the existing tenants to return, or you can increase the rent and advertise anew.
One thing is sure: evicting tenants to make renovations doesn’t give you the automatic right to a rent increase. The existing terms and conditions of their lease agreement apply. So, sorry, rent increases are out for this year.
Be mindful that the Ontario Rental Housing Enforcement Unit may come knocking if you pretend you are moving in and don’t do so. Evicting tenants under false pretenses will put you in line to pay their moving expenses, and any increase in rent at their new residence.
Transferring title when you are buying rental property in Ontario.
Other Reasons for Evicting Tenants
You may have inherited a problem tenant, and are just wondering how to ease them out the door. Evictions for non-payment of rent take an average of 75 to 110 days.
Steps to Take
- Read and understand the lease. Ask a real estate lawyer or check the Ontario Landlord and Tenant Board website https://tribunalsontario.ca/ltb/ if anything is unclear.
- Clarify the grounds for eviction (late or no rent, excessive noise, subletting without permission, pets in a no-pet unit). Check they are legally valid.
- Photograph and document the unit’s condition in case anything is damaged, or evicted tenants retaliate by trashing it.
- Always put reasons for evicting tenants in writing. Use the right form.
- Deliver the reasons by posting the eviction notice to their door, putting it in their mail slot, or sending it via double registered mail.
- Live up to your responsibilities: no entering the unit without consent or reasonable cause, removing objects, turning off utilities, changing locks, or threats.
How to buy commercial rental property in Ontario.
Why You Need a Real Estate Lawyer
Buying income property comes with landlord responsibilities. Bring your draft or signed agreement of purchase and sale to Axess Law before you commit to close the deal on a rental property in Ontario.
Ensure your offer to purchase works to your advantage.
We review your offer to purchase to ensure clauses related to secondary suites, granny flats, laneway houses, or other rental property are written in a way that protects your legal rights. If your offer to purchase places you at a disadvantage, Axess Law’s real estate lawyers negotiate with the seller’s lawyer to amend your agreement, or void it by mutual consent.
We let you know if your buyer’s deposit is at risk, and who keeps the deposit when a deal falls through. Financing an income property can take some finagling. Axess Law liaises with lenders to get their mortgage directions, or asks the seller’s lawyer for more time if financing is holding up closing a real estate transaction on time.
Problematic home inspections can add significant costs to your home purchase. Axess Law negotiates with the seller’s lawyer to request they make minor repairs, or reduce the price. We advise you if walking away is the only remedy to major structural issues that could cost you dearly.
Exercise your buyer’s right to cancel.
When the deal is done and you’re ready to move in, we even give you the keys.
Affordable Flat Rate Legal Services
Legal fees for buying or selling income properties can be hefty. Access lawyers at affordable flat rates when you use Axess Law. We charge only low, all-inclusive fees for standard legal services, with no surprises or hidden extras. You pay $999.99 and up plus HST to buy a home or land, or $799.99 and up plus HST when you sell. Our licensed real estate lawyers add a spouse to title to a property for $649 and up plus HST.
Transfer a property title to a family member in Ontario.
Cheap Real Estate Lawyers in Greater Toronto Area or Ottawa
Axess Law’s virtual real estate lawyers and in-person legal teams in Greater Toronto Area or Ottawa can assist you day or evening, 7 days a week. Call us to make appointments at our 647-479-0118 lawyer line (toll free to 1-877-402-4207), or use our easy online booking form. We have onsite parking for your convenience, and easy transit access.
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