Buying a tenanted house during COVID 19?

PriceHunter wrote: ↑ Was looking at houses, some have a tenant in the basement, would they be evicted by closing date?

Should I stay away from buying a house with a tenant right now as lucrative the price is?

Ontario-GTA location.

senasena wrote: ↑ Buying a tenanted house could be a pain in the butt and many people see it this way, hence an opportunity to score a decent deal if you are willing to take on the potential headache.
If the tenants don’t want to leave the chances of evicting them are pretty much zero right now, you can put proper clauses and conditions in your offer and put the onus on the seller to have the property empty on closing, if they are not able to do so they will need to be a compensation since they have not fulfilled their part of the contract. The seller may of course reject any such clauses or conditions.

CNeufeld wrote: ↑ You should be talking to your realtor and lawyer about questions like this. You can specify a vacant possession in your offer, which means it's up to the current owner to secure an end to the tenancy. However, you still run the risk that no matter what was decided between the landlord and tenant, the tenant decides to remain in place, which means a headache for everyone. But by specifying a vacant possession, you would have the option later to go after the seller/landlord for any damages you incurred because you couldn't get full possession.

I guess a big part of the question would be "How critical is it to you that you get a vacant possession?". If it means you can't move in and you'll be homeless with your stuff in storage and 4 kids sleeping in the car until you can get full possession, then I'd say it's a bigger risk than I might want to take. If it's a minor inconvenience (you're buying it as an investment property, but want to pick your own tenants), then it might be worth taking the chance.

C

PriceHunter wrote: ↑ But the contract by default has "Vacant possession" which means they should have it vacant by the time I take possession.

PriceHunter wrote: ↑ I heard that kicking out a tenant is a problem if they don't want to leave, but don't know what COVID-19 would add into that noting that LTB is closed. Like if I buy and have a closing of 6 months, would that be enough?

CNeufeld wrote: ↑ Sure, that's what it means. But just because they agree to it doesn't mean the tenant isn't going to be squatting in your basement when your possession date arrives. There's a process for evicting a tenant that doesn't want to move out, and right now in particular, it's a higher risk process because the LTB isn't taking in-person hearings and is likely backed up the wazoo. The tenant could agree to moving out right up until the day you take possession and then suddenly change their mind because they didn't find a suitable place, and you'll be potentially screwed. Your only real protection at that point is the fact that you specified "vacant possession" in your purchase agreement, which gives you an opportunity to pursue the seller/landlord for your damages.

C

PriceHunter wrote: ↑ Realtor said that he would have a visit or two included prior to closing. He said I can use those visits to check. But by that time if I am visiting a day before, I already have "sold"/"rented out" my current residence. Which means no place to be in. However if I visited it 2 weeks prior, I would still see the tenant is there and will not mean anything as they would say that they will leave in a week.

PriceHunter wrote: ↑ Not an investment, want to move into it, and would need to sell my current house to do so as well. The contract itself as per my realtor states "Vacant Possession". I worry that I sell my house then I won't have a place to be in having kids. Can't just go to my family's basement as I don't want to expose or burden them either.

PriceHunter wrote: ↑ Realtor said that he would have a visit or two included prior to closing. He said I can use those visits to check. But by that time if I am visiting a day before, I already have "sold"/"rented out" my current residence. Which means no place to be in. However if I visited it 2 weeks prior, I would still see the tenant is there and will not mean anything as they would say that they will leave in a week.

rob444 wrote: ↑ If you don't want as investment, then you should include in your agreement you want the unit for personal use, and consider submitting a declaration as such to the current owner. This would make the eviction process a lot simpler, as the current owner could serve the tenant an N12 form in good faith (eviction for personal use of buyer), and simultaneously submit an L2 form to the LTB to get official eviction order should the tenant decide to challenge it.
Simply saying you want "vacant possession" with no terms, means the landlord is responsible to get the tenant to move voluntarily, which can be a heck of a lot harder.

However, due to current situation LTB is not doing hearings and more importantly all evictions are suspended. So at this time even with the N12, tenants do not need to move for any reason, end of story.

When things get back to normal and LTB starts hearings for evictions again, then the tenant can be evicted as usual.

So the problem you have is that no matter what goes in your agreement, it all depends on cooperation of the tenant and when things get back to normal. There is no guarantee at this time what will be happening up to 6 months from now, so there is no guarantee the home will be vacant at any given time in the future. As mentioned, you can put wording into the sales contract that would allow you to collect damages in this case, but ultimately you may not get the vacant home when you want it.

PriceHunter wrote: ↑ But it would be my house, and I dont want to sign anything that would limit me from using it as I please, I might start for family use but might reno it and have it ready to rent.

Overall looks to be a headache to go over with no firm dates.

CNeufeld wrote: ↑ If you're not willing to sign an affidavit that the property is being purchased for personal use, you are making things more difficult for the seller to secure vacant possession. At that point, they're depending on the tenant to voluntarily give up possession of the property, rather than having grounds to file for an eviction. Which means that things could get MUCH more complicated if things go south...

C

PriceHunter wrote: ↑ Would my ultimate solution to not take possession at that time?

CNeufeld wrote: ↑ I believe that would be your "ultimate solution", but the legal cleanup would be a mess, I think.

C

PriceHunter wrote: ↑ Would my ultimate solution to not take possession at that time?

PriceHunter wrote: ↑ Legal cleanup? That would be between lawyers and I would not be the one liable right ?

Anyways looks like not so lucrative now that the headache is confirmed.

PriceHunter wrote: ↑ But the contract by default has "Vacant possession" which means they should have it vacant by the time I take possession.