If you’re interested in buying a home that has tenants, but you don’t want the responsibility of being a landlord, what are your options to evict them? If you know you want the home as your primary residence and not as an investment property, there are certain regulations in place to know about. To help you understand the ins and outs of this potentially complicated real estate adventure, we’ve made a list of a few things to keep in mind throughout the process.
1. The rights of tenants
The Residential Tenancies Act in Ontario and the Ontario Landlord and Tenant Board give tenants and landlords clear and definitive rights. For example, when a house is put up for sale, tenants must be given 24 hours notice of any showing to a potential buyer. The times for showings are also spelled out as between 8 am and 8 pm. A reassuring fact for buyers is that they have the right to look at the lease in place to see how long a term it is and how long the tenants have lived there. The existing lease will remain in effect even after the closing date; a change of ownership does not cancel out the lease.
2. Wanting to move in without tenants
One option for buyers is to specify in the offer, right from the beginning, that you want vacant possession. Writing this in the agreement upfront puts the burden on the seller to work on a mutual agreement with the tenant to end the tenancy. You can also negotiate a closing date that coincides with the lease expiration. Another alternative is that the seller could offer an incentive to you the buyer to take the tenants on. Whatever you agree on, it’s essential to carefully follow the Landlord and Tenant laws.
3. Mind the rules around getting rid of tenants
Simply put, you can’t evict a tenant until their lease has expired. The tenants must be given 60 days notice in writing that the lease is being terminated. If you, the buyer, want to do major renovations and then re-rent the space, 120 days notice must be given to the existing tenants. As the new landlord, you should know that the tenant, (with the proper notice), also has a right to move back when the work is done. This is referred to as their “right of first refusal” to occupy the premises after the renovation are done. However, there is a small caveat; they must tell you this before they move out. It’s also important to note that as the buyer you cannot legally raise the rent or modify the agreements just because you are the new owner.
It’s illegal for a buyer to evict a tenant under a false claim that they will be using the space when they have no intention of using it in reality. If the buyer evicts a tenant and the tenant later finds out the buyer never moved in, that tenant could sue for moving costs and their higher rent (if they’ve found a new place.) In such cases, the Ontario Rental Housing Enforcement Unit comes in to investigate and can press charges.
The best thing to do when you are either selling or buying a property with tenants is to check with the Landlord and Tenant Act to make sure the process is followed to the letter. Further, you’ll want to hire an experienced real estate lawyer to make sure all the details are formally sorted out and stipulated in the purchase agreement. Protecting your investment is important. If you’re looking to purchase a home, cottage or condo in the Muskoka region or would like information regarding landlord’s rights, call the Ares Law team today at 705-645-8743 to set up an appointment. We specialize in real estate law and we have a thorough understanding of local bylaws, regulations, and the complexities that come with buying or selling a home with tenants. Let us help ensure your investment and your legal rights are properly safeguarded.
