Whether you own a multi-unit apartment building or are renting out your basement, selling a property with tenants is highly nuanced. In Ontario, there is a long list of regulatory boundaries that impact how the property can be shown, sold, and transferred to another owner while there are still residents on the lease.
However, it is equally important to approach the sale of your investment property with results in mind. Not only do you want to ensure a smooth, legally compliant transaction, but you also want to sell for the highest return possible.
As West Toronto real estate agents and investors ourselves, we’re well-versed in the diverse variables that may impact your sale. In this blog post, we’re sharing our expertise with you, covering everything you need to know about selling a tenanted property in Ontario.
Investing in a rental property? Explore the benefits of buying a property with existing tenants.
Tenant Rights: How They Impact Your Sale
One of the most influential variables in selling a tenanted property is your tenants’ rights. In Ontario, selling a property with existing residents comes with differing degrees of red tape based on the length of the tenancy.
Not fully understanding your obligations as a landlord can lead to more than simple miscommunication. In more severe cases, violations could lead to delays, fines, or other penalties, all of which can negatively impact your sale.
Looking to optimize the sale of your investment property? Explore these blog posts for strategic insights.
- An Essential Guide to Property Values
- Why Staging is Important in a Balanced Market
- Should You Renovate Before You Sell
How Much Notice to Give Tenants When Selling
If you plan to sell, maintaining open and clear communication with your tenants is paramount. While there’s no legal timeline or deadline for informing them about your plans, it’s best to be as proactive as possible.
Not only will this simplify aspects of the listing process, such as scheduling open houses or showings, but it also gives them adequate time to begin looking for new living arrangements if needed.
Do I Need to Evict My Tenants Before Selling?
Some landlords assume they must initiate an eviction process simply because they wish to sell. This isn’t always the case. In fact, some buyers may be drawn to the fact that your property already has reliable tenants, saving them the time and effort required to find new ones.
However, preemptively ending tenancy could make the property more desirable in certain circumstances. Follow your Realtor’s guidance as to which path will be most advantageous for you.
N11 vs N12: What’s the Difference?
If you decide to sell your property as vacant, there will be certain regulatory hurdles. For example, you must provide adequate notice and follow the legal process for eviction in Ontario. This could include having the tenant sign an N11 form, a voluntary Agreement to End the Tenancy.
The N11 form is often confused with the N12, which a landlord must present to a tenant if they plan to evict them and use the property personally.
Showing a Rental Property With Tenants
Another area where tenant rights can directly impact your sale is showings. When buyers request to see the property in person, you will need to coordinate with the existing tenant(s) to accommodate this.
In Ontario, showings for tenanted properties may only be scheduled between 8 AM and 8 PM. Further, you must provide a minimum of 24 hours’ notice for each individual showing before entering a tenanted unit or space. Although you can ask tenants to leave the property during showings, they have the legal right to be present if they wish.
Seeking a competitive edge in one of North America’s most cut-throat markets? Explore these educational insights to build up your real estate knowledge.
- Can You Have More Than One Mortgage at a Time?
- What Investors Need to Know About the Municipal Accommodation Tax
- How to Buy an Investment Property in Canada
Can You Ask a Tenant to Clean Before a Showing?
Ensuring your property presents its best can be challenging with tenants. You should account for this as you approach the listing process. If you have a good relationship with your tenants, you can ask them to clean or stage their living space before showing, but you can’t force them to.
Other components of a high result sale, like preparations, decluttering, cleaning, repairs, and home staging, can also be difficult to implement when you have tenants. Your real estate agent will help you optimize the market appeal of your property based on the circumstances.
Sell Your Property With Christensen Group
If you’re looking to accomplish a high return sale on your investment property, you’ll want to work with an experienced, specialized real estate team. That’s where we come in, Christensen Real Estate Group.
With over 40 years of experience, we bring a wealth of knowledge to today’s fluctuating market. No matter what your selling aspirations may look like, we look forward to helping you exceed your goals.
Our unbeatable selling strategies are backed by decades of local market experience. To begin your journey to a lucrative home sale, call us at 416.441.2888 or reach us by email at evan@christensengroup.ca.
