Real Estate

Closing in jeopardy as tenant isn’t leaving. Optins?

  • Last Updated:
  • Jun 1st, 2021 7:17 am
[OP]
Deal Addict
Apr 24, 2017
2211 posts
784 upvotes

Closing in jeopardy as tenant isn’t leaving. Optins?

Late March I purchased a two bedroom condo in Ontario to live in with my daughter. They filed the N12 but don’t know if they filed the L2. I provided an affidavit for personal use.

I emailed the tenant last week with some questions about the unit in preparation for my June 10 closing in which she replied that she would be taking the hearing she’s entitled to.

The deal called for vacant possession and if it was not available, the closing would extend 30 days to allow more time to have her evicted. At that point I can accept the tenant or walk away with my deposit returned. Given the backlog with the LTB I don’t imagine it will be sorted by the end of the 30 day extension.

While I want the place, I don’t want someone else’s headache. She stopped paying rent when the N12 was served and there’s ongoing damage that she’s caused, all of which the owner is to repair.

Anyone know the current time to get a hearing with LTB? Would the owner want to extend the closing further to get her out or would they prefer the deal fails where they relist it once she’s out, getting the increase in value over the summer? I do want the place and can wait but worried the owner could use the 30 day rule to their advantage and relist.

Haven’t heard from them since I let the know the tenant isn’t leaving.
23 replies
Deal Addict
Jan 15, 2010
1256 posts
1479 upvotes
Toronto
LTB hearings are paused during the stay at home order.

Condo market has softened since March. Get your money back and buy something else, you'll probably get a better place. Absolutely do not close unless the tenant is 100% gone.
Deal Fanatic
Jul 3, 2011
6147 posts
3321 upvotes
Thornhill
Really strange agreement, technically because the closing has an "if" component to it, the agreement it is still under a condition and can be seen as an optionable contract which is iffy in terms of enforcement. It's like those stupid and meaningless unenforceable closing clauses because of covid, that popped up everywhere.

Side note, it's not a good idea tfor a seller to contact a tenant especially one they're not asuming - gives them a reason to claim harrassment.

Have your lawyer handle it, it's one of their closing duties for which they were hired.
Deal Addict
User avatar
Nov 30, 2005
1328 posts
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Ottawa, ON
Unless it was a once in a life time deal, walk away man. You do not need this headache. The tenant can drag this on for 6+ months.
[OP]
Deal Addict
Apr 24, 2017
2211 posts
784 upvotes
licenced wrote: Really strange agreement, technically because the closing has an "if" component to it, the agreement it is still under a condition and can be seen as an optionable contract which is iffy in terms of enforcement. It's like those stupid and meaningless unenforceable closing clauses because of covid, that popped up everywhere.

Side note, it's not a good idea tfor a seller to contact a tenant especially one they're not asuming - gives them a reason to claim harrassment.

Have your lawyer handle it, it's one of their closing duties for which they were hired.
I’m the buyer. On a walk through the tenant gave me their email if I had any other questions about the unit.

It is a great spot and there’s not much inventory at a comparable price. At all. So walking will almost certainly mean I spend an additional 100k+.
Deal Fanatic
Jul 3, 2011
6147 posts
3321 upvotes
Thornhill
benjicash wrote: I’m the buyer. On a walk through the tenant gave me their email if I had any other questions about the unit.

It is a great spot and there’s not much inventory at a comparable price. At all. So walking will almost certainly mean I spend an additional 100k+.
Your lawyer should handle it. They know how the agreement is written no one here does.
Deal Addict
User avatar
Nov 30, 2005
1328 posts
745 upvotes
Ottawa, ON
benjicash wrote: I’m the buyer. On a walk through the tenant gave me their email if I had any other questions about the unit.

It is a great spot and there’s not much inventory at a comparable price. At all. So walking will almost certainly mean I spend an additional 100k+.
I've seen many homes over the last month in Ottawa and generally when they have tenants, they're listed significantly less (about 100k+ less than comps). There's just too many unknown and uncontrollable so the risk is baked into the price. Sometimes you get lucky and tenants play ball but when they don't, just walk. Unless you want to start the next chapter in your life with a 6-12 month of aggravation, why risk it? Plus who knows what they will do to the place once you finally evict them.
Newbie
Jan 2, 2021
71 posts
83 upvotes
Maybe try writing a heartfelt letter to the tenant?

Sometimes tenants think they're just "giving one back" to landlords they don't like without fully understanding that they're putting someone else out of a home. If they refuse at least they get to be haunted by guilty thoughts of having screwed someone else over :/
Banned
Jan 3, 2021
151 posts
148 upvotes
TwinkoStar wrote: Maybe try writing a heartfelt letter to the tenant?

Sometimes tenants think they're just "giving one back" to landlords they don't like without fully understanding that they're putting someone else out of a home. If they refuse at least they get to be haunted by guilty thoughts of having screwed someone else over :/
yeah but what happens if they agree, and then when it's time for them to move out, they still there on closing date?
Deal Addict
Jun 7, 2017
1017 posts
791 upvotes
BC
I don't understand why you are talking to the current owner's tenant. That's not your business.

Talk to your lawyer about vacant possession not being provided by seller as per contract. Seems the seller would be opening themselves up to a MF lawsuit. The seller could throw big bucks at the tenant to get them out.
Deal Addict
Jul 22, 2009
1565 posts
1120 upvotes
Brampton
benjicash wrote: I’m the buyer. On a walk through the tenant gave me their email if I had any other questions about the unit.

It is a great spot and there’s not much inventory at a comparable price. At all. So walking will almost certainly mean I spend an additional 100k+.
Only you can decide how much risk you are comfortable with but if you are going to pay $100000 more maybe it's worth it.
[OP]
Deal Addict
Apr 24, 2017
2211 posts
784 upvotes
Ok so no one actually knows how long for a hearing at LTB or whether a nightmare tenant will be a strong motivator for the owner to keep the deal alive.

I know I can walk if the tenant doesn’t leave. I’d prefer to keep the place and extend closing until she’s out. Does anyone have an option on whether an owner would want to do that or relist, depending on how long it takes to evict.
Deal Addict
User avatar
Nov 30, 2005
1328 posts
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Ottawa, ON
benjicash wrote: Ok so no one actually knows how long for a hearing at LTB or whether a nightmare tenant will be a strong motivator for the owner to keep the deal alive.

I know I can walk if the tenant doesn’t leave. I’d prefer to keep the place and extend closing until she’s out. Does anyone have an option on whether an owner would want to do that or relist, depending on how long it takes to evict.
Hearing is min 6+ month due to backlog. Owner will have a hard time selling this place unless it's to someone who wants to take over the tenant. What you are doing wrong is trying to solve a problem that is not yours to solve. Owner is more motivated than you to close this deal I can assure you of that but you need to start putting the screws to them through your lawyer so they can try to give the tenants an incentive to move. Threaten to walk unless they can provide vacant possession and be prepared to walk.
Member
Oct 20, 2006
367 posts
12 upvotes
My guess is the seller knows they can get more for the place if they list now (compared to when OP bought a few months ago)

So seller is in cahoots with the tenant, asking tenant to cause problems and refuse to move out so OP will walk away

Then seller re-lists at higher price, and gives a small amount to tenant as a thank you
Deal Addict
User avatar
Jan 2, 2012
4124 posts
2036 upvotes
Toronto
benjicash wrote: Late March I purchased a two bedroom condo in Ontario to live in with my daughter. They filed the N12 but don’t know if they filed the L2. I provided an affidavit for personal use.

I emailed the tenant last week with some questions about the unit in preparation for my June 10 closing in which she replied that she would be taking the hearing she’s entitled to.

The deal called for vacant possession and if it was not available, the closing would extend 30 days to allow more time to have her evicted. At that point I can accept the tenant or walk away with my deposit returned. Given the backlog with the LTB I don’t imagine it will be sorted by the end of the 30 day extension.

While I want the place, I don’t want someone else’s headache. She stopped paying rent when the N12 was served and there’s ongoing damage that she’s caused, all of which the owner is to repair.

Anyone know the current time to get a hearing with LTB? Would the owner want to extend the closing further to get her out or would they prefer the deal fails where they relist it once she’s out, getting the increase in value over the summer? I do want the place and can wait but worried the owner could use the 30 day rule to their advantage and relist.

Haven’t heard from them since I let the know the tenant isn’t leaving.
One option you can consider if you desperately want the place is to assume the tenant, but ask the seller for a holdback of funds. Maybe something like $50K. Then when the tenant is finally out the home (maybe 6+ months away), add up the lost rent + home repairs + costs of you living somewhere else + any other expenses, keep that for yourself and refund the seller whatever's left.
Not sure how this type of holdback would work in reality, so talk to your lawyer.
Deal Expert
User avatar
Jan 27, 2004
46736 posts
9838 upvotes
T.O. Lotto Captain
pfcresu wrote: yeah but what happens if they agree, and then when it's time for them to move out, they still there on closing date?
Exactly! it would be heart breaking if they say

tenant : damn... I didnt know you had such a hard life. I'm sorry... We'll go...
buyer : thanks for understanding. :)

3 months later

tenant "sucker! I aint leaving..."
Deal Addict
User avatar
Nov 26, 2003
1279 posts
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Get your deposit back and move on to something else.
Deal Addict
Nov 13, 2013
2891 posts
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Ottawa
PhoenyX101 wrote: My guess is the seller knows they can get more for the place if they list now (compared to when OP bought a few months ago)

So seller is in cahoots with the tenant, asking tenant to cause problems and refuse to move out so OP will walk away

Then seller re-lists at higher price, and gives a small amount to tenant as a thank you
Higher prices now than late March? Seems unlikely. OP is saying he will spend $100k more because he'll have to buy a different unit. Frankly even if there was a unit across the hall it's worth paying more for the reduced risk. You do not want to take possession with a tenant.
[OP]
Deal Addict
Apr 24, 2017
2211 posts
784 upvotes
fogetmylogin wrote: Higher prices now than late March? Seems unlikely. OP is saying he will spend $100k more because he'll have to buy a different unit. Frankly even if there was a unit across the hall it's worth paying more for the reduced risk. You do not want to take possession with a tenant.
Absolutely agree I don’t want their headache. I do want the place though. To those saying just walk, have you ever cared about where you live and if it suits you? I could walk and be a slave to the ultra low inventory in my area and the prices that are 100k more than I agreed to pay for the original place. For a place I don’t really like. I’m not sure how that is a better play than hoping to extend closing to let the owner get rid of the problem. Ideally with it being their idea.
Member
Apr 15, 2009
258 posts
263 upvotes
toronto
benjicash wrote: Absolutely agree I don’t want their headache. I do want the place though. To those saying just walk, have you ever cared about where you live and if it suits you? I could walk and be a slave to the ultra low inventory in my area and the prices that are 100k more than I agreed to pay for the original place. For a place I don’t really like. I’m not sure how that is a better play than hoping to extend closing to let the owner get rid of the problem. Ideally with it being their idea.
in that case offer tenant 20k to move ASAP. You save 80k and that breaks the link between the tenant and current owner.

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