Selling a Tenanted Property in Ontario

Thinking about selling a tenanted property in Ontario? Whether you’re an experienced investor looking to offload part of your portfolio or a first-time landlord navigating unfamiliar territory, it’s important to understand your legal obligations and strategic options. In Ontario, the rules are very clear but there are nuances that can impact how smoothly your sale goes.

Here are the top questions landlords often ask and what you need to know before listing your tenanted property.

Selling with tenants? Here’s what you need to know!

Can I Sell My Rental Property With Tenants in It?

Yes, you absolutely can sell a property that has tenants. However, how you proceed and how attractive the property is to potential buyers depends heavily on the type of tenancy in place.

Fixed-Term Lease

If your tenant has a lease that hasn’t expired, the buyer must honour that agreement. That means the tenant has the right to remain in the property until the lease ends, regardless of the buyer’s intentions for the home. For many investors this isn’t an issue but if a potential buyer wants to move in personally, this can limit your pool of buyers.

Month-to-Month Tenancy

If your tenant is renting month-to-month, you have more flexibility. In this case, the lease can be terminated with appropriate notice provided that the new buyer (or their immediate family member) intends to occupy the property.

Knowing and understanding your tenant’s lease status upfront can help you market the property more effectively, either to investors looking for turnkey rentals or to buyers who want to move in.

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How Much Notice Does a Landlord Have to Give a Tenant to Move Out in Ontario?

This is one of the most important and often most misunderstood aspects of selling a tenanted property.

In Ontario, if a buyer (or their immediate family member) intends to move into the property, the landlord must provide at least 60 days written notice and that notice must align with the end of a rental period. For example, if rent is paid on the 1st of the month then the termination date must fall on the last day of a month. So if the notice is given on April 18th, that would give the tenant until June 30th.

It’s also essential to use the proper form, Form N12, which is provided by the Landlord and Tenant Board. The buyer must also follow through on the stated intention to occupy the property or they may face consequences including compensation to the tenant or possible legal action. One fact that is often overlooked is that the tenant is also entitled to one month’s rent as compensation when receiving an N12 notice.

Can a Tenant Refuse Showings?

Under Ontario law, a landlord has the right to show the property to potential buyers provided that:

At least 24 hours written notice is given
The showing occurs between 8:00 a.m. and 8:00 p.m
The purpose is reasonable (ex: selling the property)

That said, just because a tenant cannot legally refuse showings doesn’t mean they’re always cooperative. Maintaining good communication and respecting your tenant’s time can go a long way in keeping the process smooth. Unhappy tenants can sometimes result in poorly presented properties, refusal of showings or worse, legal complaints.

Tip: You could consider offering incentives for cooperation such as a rent reduction during the listing period or gift cards as a goodwill gesture. While this is certainly not required, it could help smooth things over during this important period.

A Strategic and Legal Approach Is Key

Selling a tenanted property in Ontario is entirely possible but it’s not without its complexities. Between navigating lease agreements, providing proper notice and managing tenant relationships, the process requires a balance of professionalism, legal knowledge and good communication skills.

If you’re not sure how to time the sale, how to serve notice properly or how to position the property for different types of buyers, working with an experienced real estate team makes all the difference.

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Final Thoughts

The bottom line? With the right strategy, selling a tenanted property doesn’t have to be stressful. Whether you’re selling a single-family rental or a multi-unit building, understanding the rules and setting proper expectations upfront will help you avoid pitfalls and close smoothly.

Have questions about your property? Want to know if now is the right time to sell? Reach out to our team, the majority of us are investors and have been through this process both personally and professionally, so we’re happy to guide you through it from start to finish.