One common question asked by landlords are the rules that surround the sale of their property and tenants. The main question is “Can I evict the tenant before I sell, so that I can fix it up?” The short answer is no.
If you want to sell a rental property, the first issue is does the tenant have a lease? Let’s say there is a lease and the tenant has eight months remaining. They cannot be evicted before the end of their lease, just because you want to sell. You can sell, but the buyer must agree to let the tenant stay. In addition, if the tenant has the right to renew their lease, then you and any buyer will have to honour that as well.
If the tenant is on a monthly tenancy the only way to evict them is if the buyer is moving into the house on closing. Therefore, you must sign an agreement with a buyer before you can start the eviction process. Then you must give the tenant at least 60 days notice before the end of a month, assuming the tenant pays on the first of the month.
Related: How to avoid renting to a tenant from hell
For example, you sign an agreement with a buyer on June 15. On June 16, the owner can serve the tenant with a 60 day notice to terminate, that cannot take effect before Aug. 31. The closing date in your agreement should be scheduled for Sept. 30 to make sure the tenant has vacated.
If there are concerns the tenant will not leave, a hearing should be scheduled before the landlord and tenant board as soon as possible so that an order for eviction can be obtained, if necessary. Tenants are often suspicious that the buyer will not move in, and will merely find a new tenant who will pay more rent. If a seller or buyer is caught tricking the tenant into leaving early, then the penalty can be as high as $25,000.
There are also rules relating to showings and open houses. A tenant must be given 24 hours written notice before an owner can show the property to a potential buyer. The time period must occur between 8 am to 8 pm. The tenant does not have to leave the home. However, if the tenant agrees to a different time, or a shorter notice period, that is OK. In my opinion, an open house that typically lasts two or more hours would not be permitted unless the tenant agrees to it.
Related: Court denies realtor $11,000 commission
If you want to evict the tenant before you put the house up for sale, the only way is to reach an agreement with the tenant to leave early. You may be able to accomplish this by assisting the tenant in finding another place to live and paying part or all of the moving costs. By doing this, you will have the opportunity to then fix your home up before putting it up for sale, thus potentially attracting more buyers. You will also not have to worry about notices or eviction notices.
In all cases, it is best to inform the tenant in advance of your plans to sell the home. When you work with the tenant, then you should have no problems with showings and then closing your home sale.
Buyers, if you are assuming any tenant and you are thinking of moving in later, make sure you find out all of the details of any lease in advance, as you will have to honour it as well.
When all parties are properly prepared and informed, selling properties with tenants becomes a less stressful process for buyers, sellers and tenants.
Mark Weisleder is a Toronto real estate lawyer.
No comments:
Post a Comment