Today I’m here to warn you about one of the most dangerous positions in the real estate game:  Being a property owner who wants to sell with a Tenant currently on the property.

To start, you don’t have a lot of control over appearance & access to the property while it’s being sold.

If the Tenant wants to leave a mess, or stay in the home during showings, or restrict access to smaller windows of time… you accept those reluctantly.

It can be a situation where it feels like you’re driving with the emergency brake on.  Very frustrating.

Next, let’s take a second to review the legal reasons a Landlord in Ontario can end a Tenancy.  You would be surprised at how many current Landlords do NOT know about this.

The really complicated part is when the Tenant tells you they’re going to leave… even if you have it in WRITING using a proper government form like an N11 or an N12… and they don’t leave.

As an owner dealing with the sale of your property, if you PROMISE vacant possession in the Agreement of Purchase & Sale, then it had better be empty on closing.

But what if the Tenant changes their mind? Or they just decide to stay where they are?

Then as a Landlord and owner… you are seriously F%$#ed.

In all caps.

As a result of their actions, YOU have breached your agreement with the Buyer and could be sued. On top of having to deal with the Tenant situation.

Even if the proper paperwork exists with the Tenant saying they’ll leave… if they don’t, YOU’RE ON THE HOOK.

This has happened many times. To the point where the situation has been named “cash for keys”, and the Tenants have often extorted money from the Landlord to leave.

I have a friend in northern Ontario, a very experienced agent, who was forced into this situation and paid $25,000 for the Tenant to leave.

And they STILL didn’t leave. They took his money and remained in the house.

It’s a truly awful position to be in. One of the worst possible things that can ever happen in a real estate transaction.

So… be VERY VERY CAREFUL when selling a property with a Tenant.

Of course, the new owner might be willing to take on the existing Tenant, but this has to be absolutely clear in writing that they agree to this.  The default agreement in Ontario states that vacant possession must be given.

Your other option is to wait until the Tenant is gone.

This can be more costly because you’re not receiving the rent revenue while the home is listed, but at least you can fix and possibly stage the home to show better.  You can allow access when needed, and offer a flexible closing date to the Buyer without any restrictions.

In other words, you have COMPLETE CONTROL of the situation.

That’s sometimes worth the extra out-of-pocket cost to carry the home without a Tenant.

It’s the only 100% guaranteed way to avoid issues.

Make sure you get really good advice, and tread carefully if you choose to sell while you still have a Tenant.

It also helps to know a good paralegal.  Dot your i’s and cross your t’s with everything you do.

Please pass this along to any friends you know that are Landlords.