By Natalka Falcomer

If you have a client who is interested in buying a property, but it has a tenant, make sure to extend the closing date.  Sixty days of written notice is required to terminate a tenancy.*

Another glitch: the date the tenancy ends must coincide with the end of term or rent period. This could result in a full year passing before your client can move in.



For example, if the tenant’s lease ends Dec. 1, 2018, your buyer can’t move until Dec. 1, 2018 even if the closing date is Nov. 1, 2017. And if you’re thinking of “fudging the dates” by giving less notice than is required, don’t! If the termination date is so much as a day off, the notice is invalid, and you’ll have to start all over again.

Previously, landlords have not been required to compensate the tenant if the landlord gave proper notice and acted in good faith. That’s no longer so. Section 48.1 of the RTA requires that the landlord compensate the tenant equal to one month’s rent. This amount has to be paid prior to the termination date specified on the N12 notice. This means a tenant can take the money and still refuse to leave!

Some real estate salespeople have encouraged investor buyers to buy a place and evict a tenant under the pretense that the buyer, or her family member, is moving in. Under the new rules, if the buyer gets caught, she can be fined up to $25,000. This fine can also be levied if the buyer decides to move out before 12 months are up following the date of eviction, rent it to her cousin and charge rent or demolish the place.

Given these rules, it’s important that you get a copy of the tenant’s lease. This way, you can gauge when your buyer can move in and how much she’ll have to pay the tenant to move out.  It’s also important that you always use the updated forms found on the Landlord and Tenant Board’s website, because the previous forms are no longer valid.

To avoid extortion by the tenant – a practice whereby tenants demand money in order to move – make sure that your buyer, once she becomes the landlord, files an L2 application and obtains an order terminating the tenancy pursuant to the notice prior to the termination date. Ensure that the order references the payment so that it is documented that you will be providing the tenant with proper compensation. Getting an order in place speeds up the process if the tenant refuses to move following the notice date and prevents the tenant from extorting the landlord by demanding more and more money in order to move out.

While affordability is an issue and the housing reforms attempted to solve this matter, the reforms have disproportionately hurt landlords and those who are scrimping and saving to buy a home. As such, buyer agents, as well as seller agents, must be aware of these financial and practical changes. They can destroy a deal.

  • This story has been updated from the original posting, which incorrectly said the term for written notice had been changed from 30 days.

10 COMMENTS

  1. Great article albeit does not apply to extant fixed term tenancies.

    Purchaser will assume the responsibility of previous landlord on a fixed term tenancy.

    If tenant pays, tenant stays re. fixed term tenancies.

    Counsel and Real Estates Sales people should advise their clients of same.

  2. Dear Natalka: Thanks for this useful article. But I’d like to ask you a question because, even when I imagine the answer, I learnt that sometimes, “logic” is not applicable to Law: What happens in the case when the Tenant is on a monthly basis ? Are 60 days enough to “kick him” out ? Does the Landlord still has to pay a compensation ? Thanks in advance for your answer.

    • Yes 60 days from before the day they pay rent on. So if it’s the 1st of the month then notice must be delivered the day before. And Yes with the new rules compensation is to be paid. Also you have to have a legal reason to end the tenancy.

  3. I thought it has always been 60 days notice, and the move in always had to comply with the terms of the lease. Month to month = 60 days from before the 1st if that is when the tenant pays…so basically 61 days or more. And if a lease is in place with more than 2 months remaining then the lease must be honoured. Have I been missing something? Legitimately curious.

  4. I don’t understand this statement: “Previously, landlords have not been required to compensate the tenant if the landlord gave proper notice and acted in good faith. That’s no longer so. Section 48.1 of the RTA requires that the landlord compensate the tenant equal to one month’s rent. This amount has to be paid prior to the termination date specified on the N12 notice. This means a tenant can take the money and still refuse to leave!” Are they stating that no matter what you have to compensate the tenant for 1 months rent or only if you are breaking the lease prior to the agreement? Typically most tenants pay first and last month rent up front which means they get the last month free…. is that what they are referring to as compensation? It does not make any sense that a landlord would just pay a tenant a month rent if everything has been conducted as per the contract.

    • Dan it means that if you are changing the use of the property, then you must compensate the tenant for the “inconvenience” or find them a suitable/similar property.

    • Exactly! it makes no sense. But that is the dumb government’s attempt to appease the voter to believing that they are doing something for them. In reality they are making the situation worse.

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