If it is a property that you own, of course you are allowed to sell it anytime you wish to, even if there are tenants living there. That said, it is not a simple and straight forward as selling a vacant property or selling your primary residence where you reside.
Relations with Tenants
You are going to need to let the tenants know of your intentions in advance. They are going to be impacted by this and you will need their cooperation and assistance. So, having good relations with your tenants can certainly help.
There is no real benefit in this process for the tenant. They just wish to quietly enjoy their rented home. Now they need to put up with the intrusion of showings from potential buyers and some uncertainty about where they are living. Unfortunately the landlord has no control over the appearance of space. It is not possible to do any of the typical staging activities we would do for a normal sale. We must rely on the good nature of the tenants to tidy up their space and maintain it throughout the showing period. We can only hope that the tenants will make their bed and pick up their dirty laundry from the floor!
Ontario Residential Tenancies Act
Whether you are the tenant or the landlord, you will need to follow the applicable laws. In Ontario that is the Ontario Residential Tenancies Act. Here are a few key points:
- If there is a fixed term tenancy agreement, the buyer must agree to assume the tenancy. That’s great if the buyer is looking for an investment property!
- If the buyer wishes to occupy the property themselves, they can work with the seller to serve the appropriate notice to the tenant for eviction. However this can only take effect after the fixed term has been completed and with 60-days notice to the tenant. Buyers may wish to align the closing date to get vacant possession.
- The landlord must provide the tenant with at least 24 hours advance notice of any real estate showings. These can only occur between the hours of 8:00am and 8:00pm. The tenant can be at home for the showings but doesn’t have to be at home. The tenant cannot insist that showings be conducted only when they are at home. (I prefer to listen to the tenant’s requests for limits around showing times and to try to accommodate their schedule, giving them back some sense of control in the process).
- It is illegal for a landlord to trick the tenant into leaving under false pretenses. For example, it is unlawful for a landlord to claim they are moving in and then, once the tenant leaves, the landlord doesn’t move in, but prepares the home for sale. In fact, the tenant can sue if this occurs, including for moving costs and higher rent paid at their new home. The Ontario Landlord and Tenant Board can also add a penalty as high as $25,000.
Vacant Is Best
Your property is most marketable when it is vacant. In this case you can accommodate all real estate showings, without concern for a tenant. You can prepare the property in advance to make it look its best by completing any painting or maintenance tasks, ensuring you get top dollar for your property. All sorts of buyers are going to be interested – from future homeowners to investors to renovators and builders. An excellent time to sell your property is as it becomes vacant between tenants. Another possibility is to come to some arrangement with your tenants to move out in exchange for some payment.
Help is Here!
If you are a landlord looking to sell an investment property, be sure to contact Ralph Evans. He is a fully qualified real estate agent with many years of experience dealing with landlord and tenant issues.