Selling a tenanted investment property in Ontario can be a profitable venture, but it also comes with its own unique set of challenges. To ensure a smooth and legal transaction, here are the steps you need to follow:
1. Provide Written Notice to Your Tenants
Before you sell your investment property, you must inform your tenants in writing of your intention to sell. This notice must include the date you plan to list the property for sale, the contact information for the real estate agent or lawyer handling the sale, and any other relevant details.
2. Follow the Required Notice Period
In Ontario, landlords must give tenants 24 hours’ notice before showing the property to potential buyers. However, if you plan to hold open houses or other events, you’ll need to give your tenants more notice. The Residential Tenancies Act, 2006 specifies the required notice periods, so be sure to review the act carefully before proceeding.
3. Allow Tenants to Remain in the Property
As the landlord, you are obligated to allow your tenants to remain in the property during the sale process. This means you must work around their schedule and ensure that the sales process does not disrupt their living situation.
4. Disclose the Tenancy Agreement to Potential Buyers
When listing your tenanted property for sale, be sure to disclose the terms of the tenancy agreement to potential buyers. This will help them understand the rights and responsibilities of the tenants and ensure they are fully informed before making an offer.
5. Protect Tenant’s Rights Throughout the Sale Process
It’s important to ensure that the tenant’s rights are protected throughout the sale process. This includes giving them reasonable notice of showings, respecting their privacy, and ensuring they are not unduly disturbed during the sale process.
6. Provide Notice of Termination if Required
If the new owner wishes to take possession of the property, you’ll need to provide the required notice period to the tenants as per the Residential Tenancies Act, 2006. This notice period can vary depending on the circumstances, so be sure to consult with a real estate lawyer or licensed agent for advice.
7. Close the Sale and Transfer Ownership
Once all conditions have been met and the sale is ready to close, the property ownership can be transferred to the buyer.
In summary, selling a tenanted investment property in Ontario requires careful planning and attention to detail. By following the steps outlined above and consulting with legal professionals as needed, you can ensure a successful and legally-compliant sale.