If you’ve been trying to look for a place that you’ve been wanting to call home and manage to finally find the perfect spot, chances are it might be tenanted. Most common with previously-rented properties, current tenants may still be in a property that you’ve been eyeing- and at times you’ll have to actually deal with them. 

Buying a tenanted property can be pretty complicated when it comes to understanding your rights as a buyer, and we’ve prepared a guide to help you out in two of the most common cases that come along with buying a tenanted property. 

You want to move in at the soonest but the tenant’s contract states that they’re gonna be there for quite longer than you wanted 

In this case, the tenant’s rights come into play, meaning that you can’t do anything about the tenant being in the property you bought except just allowing them to stay until the end of the period stated in the contract – a right of theirs that prevents you from kicking them out of the property as soon as you bought it. 

When you purchase a tenanted property, you automatically become the landlord of the tenant who was living in the space at the time of the purchase. This means that you will have to assume the current terms of the lease and the rental rate. Regardless of whether or not the terms seem favourable to you, you cannot ask the previous owner to kick them out. If the tenant’s lease has ended and is paying on a monthly basis, however, the good news is that you can receive the payment as the new owner of the property unless you decide fully to move in. 

If you’re in a hurry to move in, then you can have a written notice sent over to the tenant 60 days before the end of their contract date about your intentions to use the property, which should be backed up by an N12 (commonly known as the Notice for Landlord’s Own Use form, proof of the expiration of the lease, and an equivalent of one month’s rent as a payment to the tenant (as prescribed by law).

The tenant is paying less than the market rent value for the property and you want someone else who’s willing to pay more to rent your newly-bought property instead

In this case, there is no law or loophole that will allow you to evict the “lowballing” tenant from your property. The only way you could ever legally evict a tenant is to give them the notice required by law and move into the property (or have an immediate family member do so) within a year after eviction. Although, take note that if the Landlord Tenant Board discovers that you falsely claimed that you occupied the property but actually had someone else in it, you’ll have a severe punishment coming your way and it’s best not to risk it.

As hard as it may sound, you can try to talk to the tenant themselves and see if they’re willing to move out. Coming clean about higher rates would help out in this situation in reality but if they’re too stubborn, some extra cash might convince them (this is perfectly legal by the way).

If you’re looking to buy real estate in Toronto, get in touch with us today – we’re happy to help you find a property that suits you.