Should you sell your rental property with or without a tenant? There are pros and cons to both and it depends if you are prepared to deal with tenant issues. First, you have to understand the responsibilities as a Landlord under the Ontario Residential Tenancy Act when you sell your rental property. This blog will provide a few tips on selling your rental property effectively.
Before you contact your real estate agent to list your property for sale, you should have a candid conversation with your tenants that you intend to sell the property. Landlord and Tenant communication is key to avoid any misunderstanding between both parties to ensure a smooth selling process. Below are a few commonly asked questions by Landlords:
Rules for entering the property to show prospective purchasers:
While your tenanted property is listed on the market, tenants technically cannot disallow property showings by a licensed real estate agent, appraiser or insurance agent at reasonable hours with 24 hours written notice. Based on the Residential Tenancy Act, permitted hours of showing is between 8am to 8pm. However, your tenants may prefer to block out certain hours if showings pose an inconvenience to their schedule. This is something that should be worked out before listing your property.
Formal notice to tenants to end tenancy once the property is sold for the occupation of the purchaser:
Keep in mind that when a property is sold, the Landlord can only provide formal notice to terminate a tenancy based on these conditions:-
-If the tenants fixed term tenancy has expired, and are staying at the premise on a month-to-month basis
-If the property will be occupied for the purchaser or the purchaser’s related family for their own use upon closing of the transaction.
When to use the N12 Form – Notice to End your Tenancy Because the Landlord, a Purchaser or a Family Member Requires the Rental Unit.
Based on the Residential Tenancy Act, as a Landlord, you are required to give 60 days notice plus the date must fall on the last day of the payment period. You can use the N12 Form to provide notice to your tenants if the date. Landlords can reference the N12 form and download it here.
In Ontario, Landlords are required to compensate the tenant an amount equal to one month’s rent if the landlord or related family member want to take back the rental until for personal use.
When to use the N11 Form – Agreement to End the Tenancy
This form requires the Landlord to provide Tenant notice to vacate the premise on a mutually agreed date. Both parties are required to sign in order to execute this form. If the N11 is signed, then the N12 does not need to be provided. Landlords can reference the N11 form and downoad it here.
Selling your property with tenants can attract a larger pool of buyer, end users as well as investors who might be interested to assume the tenants. However, if you don’t want to deal with the hassle of coordinating with tenants, selling your property vacant may be a better option and will also allow a much shorter closing period. Either way, you should discuss with your real estate agent on the best approach.