Real Estate

Vacant Possession

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  • Feb 20th, 2020 10:14 am
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[OP]
Newbie
Jan 10, 2018
12 posts
2 upvotes

Vacant Possession

Looking for some clarification on purchasing a tenanted property.
Full disclosure...the property will be purchased for investment purposes and will be placed up for rent eventually.

Many of the properties I'm looking at are currently tenanted. Some with newer Standard Leases and other with tenants on month-to-month.
As a buyer, I would like to have as a condition of purchase that the property be vacant upon possession.
How does this work with the tenants...if my purchase offer is accepted is it then the current owner's responsibility to remove the current tenants?
Do different rules apply to tenants on lease and tenants on month to month?

Looking at properties in Ontario.
6 replies
Sr. Member
Oct 14, 2010
699 posts
778 upvotes
Toronto
We had done something similar for our investment condo. The APS simply said that the condo will be provided as a vacant possession. That is it no other verbiage.

After the seller agrees to it, how the seller gets the tenant out is between seller and tenant. You want to visit the condo 2-3 days before closing to ensure condo is actually vacant otherwise the seller is in breach.

In our case the seller incentivized the tenant to move out.
Deal Addict
Dec 28, 2008
1377 posts
164 upvotes
Toronto
Correct me if I'm wrong, but under the Ontario framework you have to assume the existing tenant's lease if you plan to purchase this as an investment property. If the existing tenant is booted and sees the unit isn't being used for personal use by the new buyer they can take you to the LTB.
Deal Addict
Jan 12, 2017
1661 posts
975 upvotes
There is nothing wrong with a buyer making it condition of purchase. The seller will have to decide whether it's worth paying the tenant to leave or not accepting the offer.

So long as the tenant leaves willingly or isn't booted illegally, they can't come after the new buyer.
BryceS wrote: Correct me if I'm wrong, but under the Ontario framework you have to assume the existing tenant's lease if you plan to purchase this as an investment property. If the existing tenant is booted and sees the unit isn't being used for personal use by the new buyer they can take you to the LTB.
Deal Addict
Jul 29, 2006
4163 posts
998 upvotes
try to sneak in the standard orea form. Within the finer details says that the property must be vacant.
Deal Addict
User avatar
Jan 2, 2012
4425 posts
2618 upvotes
Toronto
Rook77 wrote: Looking for some clarification on purchasing a tenanted property.
Full disclosure...the property will be purchased for investment purposes and will be placed up for rent eventually.

Many of the properties I'm looking at are currently tenanted. Some with newer Standard Leases and other with tenants on month-to-month.
As a buyer, I would like to have as a condition of purchase that the property be vacant upon possession.
How does this work with the tenants...if my purchase offer is accepted is it then the current owner's responsibility to remove the current tenants?
Do different rules apply to tenants on lease and tenants on month to month?

Looking at properties in Ontario.
Whether the tenant is on lease or month to month is really not that important, since in either case the tenant does not legally need to leave. The current owner would need to find a way to get the tenant to voluntarily agree to move, without use of the N12 form (forceful eviction for personal use of new owner).

Typically they would offer cash to the tenant to leave peacefully.

If the tenant knows their rights and really doesn't want to leave, or demands a ridiculous amount of cash the owner is unwilling to pay, they can legally just stay. In this case you'd need to take them as tenants (if you really wanted the place), or would have grounds to cancel the deal and go after seller for damages.

If you want to guarantee an eviction (assuming tenants were on month to month) then you'd need to state you want the unit for personal use and owner could use an N12 in good faith to forcefully evict them. Tenants could fight but would ultimately lose. Of course then you'd be in danger if you rented the place out within the year which defeats the purpose of buying as an investment property.

In some cases I've read of, the owner uses an N12 in bad faith to evict tenants, which can cause potential problems in the future for them if tenant leaned they were evicted illegally after new owner rents the place out. Although this would be bad for previous owner, probably a small inconvenience for new owner.
Deal Guru
User avatar
Mar 23, 2008
13006 posts
9965 upvotes
Edmonton
BryceS wrote: Correct me if I'm wrong, but under the Ontario framework you have to assume the existing tenant's lease if you plan to purchase this as an investment property. If the existing tenant is booted and sees the unit isn't being used for personal use by the new buyer they can take you to the LTB.
You're wrong.

The only way you as the buyer could be taken to court is if you signed an affidavit saying you were taking over the property for personal use when in fact, you were purchasing the unit to rent. Otherwise, what happens between the seller and their tenant stays between the two of them. The SELLER may be opening themselves up to a lawsuit if they evicted the tenant in bad faith.

C

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