Landlord Rights – Selling Your Property

November 14th, 2011 · 1 Comment · Buying or Selling Your Property

Huge, Abandoned Houses At Signal Hill, Kota Kinabalu
Creative Commons License photo credit: thienzieyung

 

Here’s another reader question, this one about the sale of a property…

Reader Question

I gave my tenant her notice through an email that I would not be renewing her lease two months before her lease was up telling her that I would be selling the place. She acknowledged it and agreed to showings. I constantly kept her up to date including when I found a buyer and offered her another month over and above the two I has already gave as my buyer wanted a later closing. I gave her her notice on Sept 5, and she has to vacate by Nov 29 or I will be in breach of contract with my buyer.

She said she may not be able to get out by the 29 as she is having trouble finding a place in which I told my lawyer handling the sale. I sent her an email telling her that she has to be out as the place is sold and the buyer plans on moving in on that date as the buyer sold her place and her closing is Dec 7th. The Tenant has hired a lawyer in which he emailed me a letter that says is also in hard copy to my address stating that I did not give her proper notice as I did not fill our the N12 form for ending a tenancy.

Know The Law

This question is a case study in what happens when an unsuspecting landlord does not know the law.

Here’s the list…

  1. Service by email is not considered a legal method approved by the Landlord & Tenant Board, you cannot deliver legal notices via email. Email can be used to prove communications between you and your tenants (as evidence)
  2. You Gave Up Rent???? – Why ? You did not have to do that.
  3. Approved Forms – You must use approved forms for such things as notices to vacate. In this case the N-12
  4. Tenant Tenure – In Ontario there is no form you can give a tenant to advise them that you are not renewing their lease. Leases are automatically renewed at the end of the lease. Therefore if you put your property on the market, you just tell the tenant you are doing so. Only when the property is sold can you give the notice that gives them 60 days to leave and then only if the purchaser requires the property for their own personal use. You cannot give this notice until the property is sold.
  5. Proper Notice Periods – You cannot give a notice to vacate on any day other than the last day of the rental period. So the 28th or 29th (for February) or 30th or 31st (for other months). If you give a notice on September 5th the earliest it would be valid for, assuming the dates are correct would be November 31st. You can deliver the notice any day but it has to be for the end of the rental period.   In your case with the property changing hands you would have had to terminate the tenancy for September 30th (because you can’t end the tenancy in the middle of the month of November). The latest day you could have delivered the notice to her is July 31st. Alternatively you could have pushed for a November 30th closing.
  6. Tenants Not Leaving – In spite of all that if the tenant didn’t leave, your options are bad. You would then have to got to the Landlord & Tenant Board and file the notice, certificate of service and L2 -Application to Terminate a Tenancy and Evict a Tenant. They will give you a hearing date a lot farther into the future than you will be comfortable with. At least one month perhaps two depending on how overbooked the courts are. Then at least several days for the Adjudicator to write the Order, five days for mailing and more days to give your lovely tenants time. If they are disabled or poor it’s even longer. Unless you had a closing 6 months away you would surely breach the closing day!

If it sounds like a shit sandwich it is…in your situation you have only one a couple options…

You Have The Right To Start Over

You could give the N-12 right now, valid for January 31st. At that time, you can file for eviction. You could also give the N-4 for unpaid rent up to the day she moves out.

You Have The Right To Pray and Hope

You have the right to hope she moves out and things work out. Considering she’s lawyered up and knows that she doesn’t have to move, I wouldn’t rely on this.

You Have The Right To Pay

You could agree to terminate the tenancy and pay her if she moves out on the day she’s supposed to.  That would be a Form N-11 agreement to terminate a tenancy. Again this is only valid for the end of a rental period. You can’t agree to terminate on November 29th. However if she’s getting a nice fat check to be out on the 29th and no other day, then she might move out.

Bad Tenants and Ideas That Go With Them

If you are a landlord that has a bad tenant, you would not be the first just to come up with the idea of selling your property or filling out the N-12 so you can use the property for your own personal use. Truth is that if you have a bad tenant, they will block the sale, they will not move out and all kinds of histrionics that will make your life as the seller crazy. If you do find someone who will buy your property with a bad tenant in place, they will surely ask for and get a price reduction based on that bad tenant. Your real estate agent will tell you this.

Quite frankly, most experienced purchasers assume the reason you are getting rid of your rental property is because the tenants are bad and they will ask for vacant possession. Put yourself in this poor buyer’s shoes for a moment, her house is closing December 7th and if the seller does not get rid of this tenant…she is homeless and has doubtlessly paid a deposit, secured financing, got a home inspection and so on. What are the odds she’ll ever buy a tenanted home again? Many landlords who have bought a house with a tenant in it have discovered to their dismay that the reason the home was on the market was because of the bad tenants in it.

Anyone else have any ideas about how this owner can successfully close on her property? Or horror stories of your own?

 

 

 

 

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