Buying property with a month to month tenant.

UrbanPoet wrote: ↑ Hello,

If youre buying a property with a month to month tenant which you wish to move into for personal use... do you have to issue an N12 or just give 60 days notice?

B.c i read this... it says 60 days notice , with no mention of an N12.

https://www.getwhatyouwant.ca/selling-tenanted-house



Location : ONT.

The N12 is the officially accepted document to provide your 60 days notice. Why would you risk doing anything else?

C

CNeufeld wrote: ↑ The N12 is the officially accepted document to provide your 60 days notice. Why would you risk doing anything else?

C

Just verifying. Because the article said 60 days notice if theres a month to month lease. Doesnt mention specifics of the N12 process.
I guess they were just keeping the blog post short.

UrbanPoet wrote: ↑ Just verifying. Because the article said 60 days notice if theres a month to month lease. Doesnt mention specifics of the N12 process.
I guess they were just keeping the blog post short.

They also don't describe the 1 month's compensation that you would owe or actual process involved in evicting (the N12 is just a form, not a process, and it's not even the only form required to evict a tenant for personal use). So yeah, it's a general purpose document, not a roadmap.

C

I believe you can request vacant possession upon purchase and let the vendor deal with it. They might need confirmation from you that you will be owner-occupied.

What if the tenant decides to stay.... Because he can.

UrbanPoet wrote: ↑ Hello,

If youre buying a property with a month to month tenant which you wish to move into for personal use... do you have to issue an N12 or just give 60 days notice?

B.c i read this... it says 60 days notice , with no mention of an N12.

https://www.getwhatyouwant.ca/selling-tenanted-house



Location : ONT.

In most cases the buyer doesn't do anything, it's the seller that needs to go through the eviction process. As long as buyer indicates in the purchase agreement they want the unit for personal use (and can optionally provide a declaration as well), the seller should issue the N12 to tenant with reason that buyer wants for personal use. They can also file an L2 form with LTB to start the eviction process. The seller will also be responsible to pay the tenant 1 months rent compensation.

Without issuing the N12 form, the tenant does not need to leave. Verbal or other written demands to vacate the unit are not sufficient.

60 days notice is required, so ample time should be given to closing date to allow the tenant to vacate and seller to repair/clean the home before buyer takes it.

However even with this, if the tenant decides to challenge the N12 then seller will need to take them to an LTB hearing to force the eviction. If this takes many months to do, the tenant does not need to leave during this time. This would create complication come closing time and buyer and seller would need to agree on how to proceed i.e. extend the closing date indefinitely, void the deal, have buyer take tenant, etc etc.

Not sure if you made the offer already. Just put vacant possession in the offer (no need to mention personal use or anything). It’s up to the seller to evict the tenant.

headleygrange wrote: ↑ Not sure if you made the offer already. Just put vacant possession in the offer (no need to mention personal use or anything). It’s up to the seller to evict the tenant.

Except the tenant is under zero obligation to leave and may demand an exorbitant sum to do so voluntarily. Any seller should know this, and the potential legal liability if they're unable to evict the tenant to fulfil the contract, so may simply refuse any offer without a declaration the buyer wants for personal use.

rob444 wrote: ↑ Except the tenant is under zero obligation to leave and may demand an exorbitant sum to do so voluntarily. Any seller should know this, and the potential legal liability if they're unable to evict the tenant to fulfil the contract, so may simply refuse any offer without a declaration the buyer wants for personal use.

Exactly. That’s the sellers headache and they know that.

A buyer should never put such statement in the agreement that it’s for personal use. It’s going to be ugly for the buyer.

Vacant possession period.

headleygrange wrote: ↑ Exactly. That’s the sellers headache and they know that.

A buyer should never put such statement in the agreement that it’s for personal use. It’s going to be ugly for the buyer.

Vacant possession period.

Not really. If the buyer genuinely wants to move into the home, then putting in a declaration for personal use would allow the seller to legally issue an N12 to the tenant. Faced with a legal good-faith eviction, the average tenant may simply move and help ensure vacant possession upon closing. With no N12 it's up to the seller to bribe the tenant to leave voluntarily.

In both ways there is still danger the tenant will not want to leave. So buyer/seller can also have clauses on what happens in the event home is not vacant at closing. Seller needs to protect themselves from being sued due to a contract breach that was solely fault of the tenant.

If I was a seller and buyer offered to buy with generic vacant possession clause, I would include my own condition for something like 1 week to negotiate with the tenant to get them to sign an N11, or could void the deal.

rob444 wrote: ↑ Not really. If the buyer genuinely wants to move into the home, then putting in a declaration for personal use would allow the seller to legally issue an N12 to the tenant. Faced with a legal good-faith eviction, the average tenant may simply move and help ensure vacant possession upon closing. With no N12 it's up to the seller to bribe the tenant to leave voluntarily.

In both ways there is still danger the tenant will not want to leave. So buyer/seller can also have clauses on what happens in the event home is not vacant at closing. Seller needs to protect themselves from being sued due to a contract breach that was solely fault of the tenant.

If I was a seller and buyer offered to buy with generic vacant possession clause, I would include my own condition for something like 1 week to negotiate with the tenant to get them to sign an N11, or could void the deal.

As a buyer, I would never agree to anything that puts me in a tight situation. I myself bought a property that was tenanted when it was put on sale. My offer was for vacant possession and nothing else. I rented it immediately after buying, but I’m not obligated to disclose that to the seller. Whatever the evicted tenant wants to pursue would only be with his landlord (the seller) and no strings attached to the buyer.

headleygrange wrote: ↑ As a buyer, I would never agree to anything that puts me in a tight situation. I myself bought a property that was tenanted when it was put on sale. My offer was for vacant possession and nothing else. I rented it immediately after buying, but I’m not obligated to disclose that to the seller. Whatever the evicted tenant wants to pursue would only be with his landlord (the seller) and no strings attached to the buyer.

Your situation doesn't apply here, since OP said they wanted the home for personal use, not to re-rent. So whether they asked for generic vacant possession, or vacant but with declaration for personal use, really makes no difference to them.

At least with the personal use declaration the seller can use N12 to forcefully evict in good faith, which may offer better chance of actually being vacant on closing date.

As a seller I would never agree to anything that puts me in a tight situation, so would probably have passed on your offer. The risk to seller of not knowing what it will take for tenant to leave voluntarily, is too great. Of course every situation is different and depends on how desperate seller is to sell, if they are close with tenant and understand how they will respond, etc etc.

As others pointed out, in Ontario, a landlord cannot simply evict a tenant for no reason so a buyer can't just ask for "vacant possession" (well, you can ask but legally the seller can't provide it unless the tenant chooses to leave). However, as mentioned, if the purchase is for "owner-occupied", I suspect that the seller can work with the buyer to provide a N12 to the tenant so that the buyer will get vacant possession on closing (provided there's at least 60 days notice).

headleygrange wrote: ↑ As a buyer, I would never agree to anything that puts me in a tight situation. I myself bought a property that was tenanted when it was put on sale. My offer was for vacant possession and nothing else. I rented it immediately after buying, but I’m not obligated to disclose that to the seller. Whatever the evicted tenant wants to pursue would only be with his landlord (the seller) and no strings attached to the buyer.

I feel bad for the tenant you kicked out so you could bring in another one at market rent. Horrible loophole that you took advantage of that should be closed. It leaves the previous tenant in a really bad place - they cannot go after you, and they cannot really go after the previous landlord because they were presumably acting in good faith to deliver vacant possession in order for you, or a family member to move in.

I guess you can live with that. I could not.

camzie wrote: ↑
I feel bad for the tenant you kicked out so you could bring in another one at market rent. Horrible loophole that you took advantage of that should be closed. It leaves the previous tenant in a really bad place - they cannot go after you, and they cannot really go after the previous landlord because they were presumably acting in good faith to deliver vacant possession in order for you, or a family member to move in.

I guess you can live with that. I could not.

There is no "loophole". In this case the tenant did not need to move if they didn't want to. It was up to the seller to encourage the tenant to move out voluntarily, usually by offering some amount of compensation. But ultimately it's entirely up to the tenant. The fact the buyer and seller had a deal on vacant possession, is irrelevant to the tenant since it didn't involve personal use criteria. If tenant flat out refused to move for any sum, seller would have breached the contract and buyer may be able to sue them.

If the seller used an N12 in this case, that would be a bad faith illegal eviction since there was no personal use involved. Tenant could file a complaint with LTB afterwards getting payments for their losses/damages, and a big fine for the seller.

michelb wrote: ↑ As others pointed out, in Ontario, a landlord cannot simply evict a tenant for no reason so a buyer can't just ask for "vacant possession" (well, you can ask but legally the seller can't provide it unless the tenant chooses to leave). However, as mentioned, if the purchase is for "owner-occupied", I suspect that the seller can work with the buyer to provide a N12 to the tenant so that the buyer will get vacant possession on closing (provided there's at least 60 days notice).

Just need to note that even if using personal use and N12 route, there's a chance the tenant will refuse to move and will need an LTB hearing and forceful eviction. So that 60 days may turn into many additional months, meaning buyer and seller should have a plan on how to proceed.

At least the N12 though will eventually get the tenant out even if delayed, while if not using it the tenant never needs to leave.

rob444 wrote: ↑ There is no "loophole". In this case the tenant did not need to move if they didn't want to. It was up to the seller to encourage the tenant to move out voluntarily, usually by offering some amount of compensation. But ultimately it's entirely up to the tenant. The fact the buyer and seller had a deal on vacant possession, is irrelevant to the tenant since it didn't involve personal use criteria. If tenant flat out refused to move for any sum, seller would have breached the contract and buyer may be able to sue them.

I'm not privy to all of the facts of this specific case, but your argument assumes the tenant knew their rights, and often they do not. Sure there are "professional tenants" but there are also tenants where language barriers may be an issue, or there is an overall imbalance of power between the landlord and tenant. In this case, the buyer knew the property was tenanted and used a vacant possession clause with the intention of re-renting the property at market rates. Maybe it is technically legal, but it sure smells bad to me.

camzie wrote: ↑ I'm not privy to all of the facts of this specific case, but your argument assumes the tenant knew their rights, and often they do not. Sure there are "professional tenants" but there are also tenants where language barriers may be an issue, or there is an overall imbalance of power between the landlord and tenant. In this case, the buyer knew the property was tenanted and used a vacant possession clause with the intention of re-renting the property at market rates. Maybe it is technically legal, but it sure smells bad to me.

You are inventing a situation that may or may not exist. There is nothing fishy with a tenant and landlord mutually signing an N11 for the tenant to voluntarily leave, based on some compensation the landlord offered. This is an entirely good faith, legal way to do so. As long as landlord didn't act in bad faith by claiming personal use when there was none.

Again, the vacant possession clause is irrelevant to the tenant and has no bearing on if they will move or not. It's no different from a landlord compensating their tenant to voluntarily leave, just to re-rent it at a higher price themselves.

If tenants don't know their rights, they may get taken advantage of regardless of the situation.

michelb wrote: ↑ As others pointed out, in Ontario, a landlord cannot simply evict a tenant for no reason so a buyer can't just ask for "vacant possession" (well, you can ask but legally the seller can't provide it unless the tenant chooses to leave). However, as mentioned, if the purchase is for "owner-occupied", I suspect that the seller can work with the buyer to provide a N12 to the tenant so that the buyer will get vacant possession on closing (provided there's at least 60 days notice).

Is it true, if the buyer says its for "owner occupied", and then after getting the possession of the house, he cannot rent it after for 1 year.? If buyer rents out after possession, In that case the tenant goes after buyer or seller?

headleygrange wrote: ↑ Exactly. That’s the sellers headache and they know that.

A buyer should never put such statement in the agreement that it’s for personal use. It’s going to be ugly for the buyer.

Vacant possession period.

So if the buyer asks for vacant possession, he can tenant it out after possession?

The previous tenant cannot sue the buyer?