Your Guide to Buying or Selling a Tenanted Property in Toronto - Bosley Real Estate Ltd. Brokerage - Homes and houses for sale in Toronto including Cabbagetown, The Annex, Danforth Village, Lawrence Park and Riverdale

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15 May 2019
Bosley Real Estate

Your Guide to Buying or Selling a Tenanted Property in Toronto

You own a property in Toronto and have tenants currently living there but want to sell… so now what? You have a right to sell your property, but having renters can certainly impact the process. Depending on the lease terms and the particular circumstances of each, the process will look different. We put together a guide to help make the process is as seamless as possible!

Can You Sell an Occupied House?

The simple answer is yes. However, when selling a tenanted house it is best to take extra care and do additional research to understand your rights and those of the tenants. Your tenants will be greatly impacted by the property being on the market (i.e. open houses, showing appointments, cleaning, etc.) so it is important to be transparent throughout to ensure the process goes as smoothly as possible. Further, the Ontario Landlord and Tenant Board places stiff penalties on landlords who ask tenants to move out under the pretense that the owners will be moving in only to sell the property. For that and many reasons, open communication is the best policy.

Before you list your home, we recommend first working with your tenant to set parameters that work for both parties. For example, you may agree to have the home shown only during a specific window of time. While landlords can show their property any day of the week, they must do so between the hours of 8 a.m. and 8 p.m. As long as the owner provides 24-hour written notice, Ontario law requires tenants to allow showings. Tenants are required to keep pets restrained during showings, however, it is up to the tenant whether they want to remain on the property or vacate during this time.

Having experience selling a tenanted property in Ontario, our Bosley team members have found that as long as you have straightforward communication with the tenants, the selling process can be as simple as if you lived there yourselves. Those interested in buying a tenant-occupied home may also be doing so for investment reasons - so it could work well to your advantage.

Month-to-Month vs. Fixed-Term Leases

Naturally, month-to-month leases provide the most flexibility in selling situations. Tenants must be given 60 days notice to vacate a property in Ontario, so consider this when timing your home to hit the market. As long as tenants are abiding by the lease agreement and paying rent on time, they have a right to remain in the property until the lease expires.

If the property changes ownership during a fixed-term lease, the buyer must respect the terms of the existing lease. While a fixed-term lease may slow down the buying and selling process, it is not necessarily a deal breaker. If your property lends itself well to being an investment home, having a lease at the time of the sale will cause no interruptions for the buyer of a tenanted house. You also run the option of waiting until a lease expires to list the property, in which case you would not want to renew the lease or rent to a new tenant. This may result in your property sitting empty for a period of time, so consider what is best for your financial situation.

Marketing a Tenanted Home

Marketing is a significant aspect of real estate, and when selling a tenant occupied property in Ontario the marketing of it requires special care. Staging is no longer an option, as you no longer have the right to do so in an occupied property. You can’t force your tenants to arrange their belongings a certain way but you do have the right to make repairs. This includes fixing anything broken, repainting walls and replacing the carpet. The money saved on staging could be put towards offering to provide professional cleaning for your tenant prior to an open house ensuring the property is shown in its best light. Maintaining a positive relationship with your tenants goes a long way, as tenants will be more willing to cooperate and prepare the property for showing.

Working together with your tenants will result in a win-win situation for both parties. For the potential new homeowners, buying a tenanted home comes with its own set of specific needs but that should not deter you from selling your home if occupied.

Every member of the Bosley Real Estate team has experience with tenanted properties and we look forward to helping you list yours. We’d love to hear in the comments below what worked well when you sold your occupied homes!