When a property with tenants is sold in Ontario, tenants are protected under the Residential Tenancies Act (RTA). This means that a sale does not automatically terminate a lease or rental agreement. Whether the tenant is on a fixed-term lease or a month-to-month agreement, there are legal steps a new owner must take if they wish to have the tenant vacate the property.

What Happens When a Property with Tenants Is Sold?

1. If the Tenant Has a Lease

A tenant with a fixed-term lease has the right to stay until the lease expires, regardless of the property’s sale.
The new owner automatically becomes the landlord and must honor the lease agreement.

2. If the Tenant Is on a Month-to-Month Agreement

The tenant can continue renting under the same terms.
The new owner cannot force the tenant to move out unless they issue proper legal notice under specific conditions.

Can the New Owner Ask the Tenant to Move?

Yes, but only in specific circumstances and by following the legal process.

1. Buyer Wants to Move In (N12 Notice for Personal Use)

If the buyer (or an immediate family member) plans to move into the unit, they can serve the tenant an N12 notice.
The notice must be given at least 60 days before the desired move-out date, aligned with the rental period.
The buyer must genuinely intend to live in the unit for at least one year.
The tenant must also be compensated with one month’s rent.

2. Major Renovations or Demolition (N13 Notice for Renovation or Conversion)

If the new owner plans to conduct substantial renovations that require the unit to be vacant, they can issue an N13 notice.
Tenants may have the right to return once renovations are completed.
If the property is being demolished or permanently converted into a non-residential unit, the tenant may not have the right to return.

3. Agreement Between the Tenant and Buyer

A tenant may choose to leave voluntarily if they negotiate a cash-for-keys agreement.
This is not legally required but is often used as an incentive for tenants to move out earlier than required.

What If the Tenant Refuses to Leave?

If a tenant does not move out by the termination date, the landlord cannot forcibly remove them.
The landlord must file for eviction with the Landlord and Tenant Board (LTB).
If a landlord falsely claims they need the unit for personal use but then rents it out to someone else, the tenant can file a T5 complaint, and the landlord may face fines.

Key Takeaways

A fixed-term lease remains in effect even after the sale.
Month-to-month tenants cannot be forced to leave unless legal eviction notices are served.
Proper notices (N12 or N13) must be given, and in some cases, compensation must be provided.
A tenant cannot be illegally evicted or pressured to leave without due process.
If an eviction notice is given under false pretenses, the landlord can face penalties.

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Tenant Rights When a Property is Sold in Ontario