Selling a tenanted property in Ontario

A sale on its own does not end a residential tenancy. When the property transfers, the buyer becomes the landlord on the same terms, and the tenant keeps their lease, their rent, their deposit and every protection they had before. A fixed-term lease that has ended becomes month to month, and the buyer takes that on too. This is the starting point for every decision that follows. If your buyer is an investor, the tenant is part of what they are buying and the rent, the lease and the payment history become selling features. If your buyer wants to live in the home, the tenancy can only be ended through the specific process the Act provides, and only in the circumstances it allows. What you cannot do is write a clause into the agreement of purchase and sale that requires the tenant to leave; the tenant is not a party to that agreement and is not bound by it.

To show the unit to a potential purchaser, you or a registered real estate representative with your written authorization must give the tenant written notice at least 24 hours before entry, stating the reason, the day and a time between 8 a.m. and 8 p.m. The tenant does not have to be present and does not have to leave, and you cannot require them to tidy or to keep the unit show-ready. Once notice of termination has been given or an agreement to end the tenancy exists, the Act allows entry to show the unit to prospective tenants with a reasonable effort to inform the tenant rather than formal written notice, but that provision is about prospective tenants, not buyers, so the team treats 24 hours in writing as the standard for every showing. In practice, cooperation is earned. The team meets the tenant early, agrees on showing windows that respect their schedule, batches showings where possible, and, where the owner agrees, offers a modest consideration for their patience. A tenant who feels respected keeps the home presentable; one who feels pushed does not.

If your buyer, or the buyer's spouse, child or parent, or a caregiver for one of them, genuinely intends to live in the unit, the Act lets you, as the current landlord, give the tenant a notice to end the tenancy on the purchaser's behalf. Three conditions matter. First, the property must contain no more than three residential units, or be a condominium unit. Second, you must already have a signed agreement of purchase and sale; the notice is given after the deal, not to clear the way for one. Third, the purchaser must in good faith require the unit for their own residential occupation. The notice is Form N12, the termination date must be at least 60 days after the notice is given and must fall on the last day of a rental period or the lease term, and you must pay the tenant compensation equal to one month's rent, or offer another acceptable unit, on or before that termination date. A notice with the wrong date or missing compensation is void, so most sellers have a lawyer or paralegal prepare it.

A tenant who receives an N12 is not required to move out on the termination date. If they stay, the landlord must apply to the Landlord and Tenant Board for an eviction order, and at the hearing the purchaser's good-faith intention to occupy is the central question. Board hearings are scheduled months out, so your closing date needs to allow for that possibility, and your agreement of purchase and sale should say what happens if the tenant has not left by closing. A tenant who moves out and later learns the purchaser never lived in the unit can apply to the Board for a remedy against the landlord who gave the notice, and the Act provides penalties for notices given in bad faith. If the tenant is willing to leave early on agreed terms, the cleaner route is a mutual agreement to end the tenancy on Form N11, often with a negotiated payment, signed voluntarily and without pressure. A lawyer should draft or review whichever route you use.

Who your buyer is determines how the home is marketed. A property sold with the tenant staying is presented to investors: the listing states the rent, the lease term, the deposit held and whether the unit is a legal secondary suite, and the team prices it on income and condition rather than on owner-occupied comparables alone. Fewer buyers compete for a tenanted home than for a vacant one, and the team will tell you plainly what that means for price and time on market. A property sold for a purchaser's own use is marketed as a home, with the tenancy disclosed in the listing so that no buyer is surprised, and the team makes sure the buyer's agent understands the N12 timeline before any offer is written. Either way, disclosure of the tenancy is not optional; a buyer who discovers an undisclosed tenant has a problem, and so do you. The team can also discuss with you whether offering the tenant an incentive to leave before listing is worth the cost.

If you own a tenanted property in Mississauga and are weighing a sale, ask the team for a plan that respects the tenant and reaches the right buyer.