If you’re looking at buying a home that is currently a rental property, there are a lot of facts you need to know before you sign on the dotted line, especially if you’d like to have the home as your primary residence. We’ve outlined the top 3 concerns to help buyers navigate through this unique situation so that you understand your rights and responsibilities along the way.
1. Buyers’ and tenants’ rights
Ontario has clear laws and regulations regarding the rights of tenants and landlords alike. When a landlord wants to visit or show an apartment or house for example, tenants are to be given 24 hours notice, and it must fall within 8:00 a.m and 8:00 p.m. Tenants must comply with these showings unless they have a legitimate reason why they cannot.
For prospective buyers, they are legally allowed to review the lease and find out the rental amount, length of term, and so on. However, the lease cannot be broken simply because of the sale of the home.
2. Negotiating the purchase
It’s illegal to break a lease before it’s expired without due cause, unless the owner of the home (or certain family members) plan to move it. In those instances, 60 days’ notice is required.
However, as a buyer, you can negotiate a closing date that coincides with the expiry of the lease, but then be sure to tack on the additional notice that you are required to give the tenant. Alternately, you can request that the seller provide a financial incentive for you to purchase the home and take on the landlord role until such time as the lease expires. Keep in mind that a change of ownership doesn’t not mean you can legally raise the rent or alter the terms of the lease.
3. What about moving in yourself?
Some landlords try to falsely claim that they plan to move into the home in order to get rid of certain tenants. If caught, the landlord can face serious charges and pay a hefty penalty. If you want to move in legally, you must follow the steps outlined in the Landlord & Tenant Act. Unfortunately, this may mean that you have to find alternate accommodations until the lease expires on your newly-purchased home, but the good news is that you’ll have the rental income to fall back on.
As you can see, buying a property that has tenants comes with some very specific and legal parameters. Be sure to retain the services of an experienced real estate lawyer who will advise you on your rights and responsibilities; you don’t want any unwelcome surprises popping up at any time during the process. Connect with the Ares Law team in Parry Sound; as specialists in real estate law, we understand the legalities of buying or selling a home with tenants. Call today at 705-746-6444.
