Are you ready to sell your tenanted property in Toronto? If you have renters, there are a few things you should be aware of. Ontario’s Residential Tenancies Act lays out the rights of tenants—and your responsibilities toward them.
Fortunately, selling a tenanted property in Toronto doesn’t have to be complicated or stressful. To ensure that the process goes smoothly, here’s what you should know…
One of the most common misconceptions about selling an investment property in Toronto is that existing tenants must leave before ownership can be transferred. The truth is, tenants have the right to live in a property until their lease is up. When a new owner enters the picture, the obligations laid out in the lease agreement are transferred to them—until the end of the term for which it’s valid.
If your tenants are renting month-to-month, the rules are different. A new owner can ask them to leave, but only if they plan to occupy the tenant’s space themselves (or if one of their family members plans to move in). They can’t simply force one person out in order to rent the space to someone new. They must also provide 60 days’ notice before the tenant has to leave (starting from the first of the month).
What about tenant rights during the selling process? When it comes to showing a property, you must inform its occupants 24 hours in advance.
When you’re ready to sell your Toronto home, knowing the rights of your tenant is crucial. Of course, it’s just as important to know how those rights could impact your upcoming sale.
First off, marketing can be a challenge. As any good real estate agent will tell you, decluttering, cleaning, and staging are often crucial to attracting the right buyer. Unfortunately, these steps can become a lot more difficult when you have a tenant. Your control over the property’s appearance will be limited, and you may have difficulty getting an appealing set of photographs for your listing.
The 24 hours you’re required to give tenants before showing your property can also present an obstacle. Busy schedules mean that many buyers prefer to do last-minute showings. If your tenants insist on having a full day’s notice, you may miss out on some opportunities to sell.
Selling a tenanted property in Toronto may require a bit of extra thought. Fortunately, there are a few steps you can take to simplify the process—and ensure that your sale is as profitable and low-stress as possible.
If you’re thinking of selling soon, don’t sign a new lease. As tempting as it may be to make some extra money, it probably isn’t worth the complications that are bound to arise when you’re ready to sell.
If you’re planning to sign a lease, charge your tenants full market value—and increase the rent regularly. When it comes time to put your property on the market, you want to ensure that it sells for as much money as possible. By charging a tenant too little, you’re limiting how much income the next owner can generate if a lease transfer occurs. Unfortunately, your property could be seen as less valuable by future buyers as a result.
Last but not least, it’s always a good idea to maintain respectful relationships with your tenants. Not only is it the right thing to do, but it can make life a lot easier when it comes time to sell. A tenant who feels that they’ve been treated fairly is far more likely to be cooperative at every stage of the selling process.
For over 30 years, our clients have trusted us to minimize risk, offer unbiased opinions, and ensure their best interests are served. Contact us today to talk about your needs, by emailing us at firstname.lastname@example.org or calling us at 416-441-2888 ext. 772.