You may have a wonderful tenant, but the time comes to sell the tenanted property. However, the buyers actually intend to use the property for themselves. They do not need tenants.
What is your legal recourse to evict a tenant because you’re selling your house or condo?
- According to the Residential Tenancies Act, all covenants concerning things related to a rental unit or the residential complex “run with the land.” It does not matter whether or not the things existed at the time of the covenants. In simple terms, the landlord cannot evict the tenant just because the landlord sold the building or house to another owner.
- However, the buyer may very well want the property for herself and her family. It means that s/he wants the property free of the tenants.
- In these cases, an agreement or purchase and sale of the property would usually include a provision that the property must be free of tenants at closing.
- In these situations, The Residential Tenancies Act does permit eviction of the tenant to ensure that the buyer can use the property as he or she wishes.
- At the same time, there is a procedure for eviction to follow to the dot. The Act aims to ensure the tenant eviction isn’t “frivolous.” In other words, the Board ensures that the landlord doesn’t use the sale as an excuse to get rid of a tenant s/he doesn’t like.
What the landlord must prove to evict a tenant because the property is being sold
- In general, the Act will require the landlord to prove two points:
- that he/she has, in fact, sold the property, and
- that the new owner does, in fact, need it for his or her own needs.
If the purchaser requires the rental unit for any other purpose, for example, he/she is going to have other tenants, the Board will not evict the current tenant on this ground.
Timeline
- The landlord can evict the tenant only after she/he has entered an agreement of purchase and sale. It is not enough for the landlord to just have an intention to sell the property.
- It is not necessary to wait for the closing day to evict to start the eviction process.
Process for evicting a tenant because of the sale of the property
Eviction Notice
- The Residential Tenancies Act regulates the procedure to terminate the tenancy when the purchaser needs the rental unit.
- The process begins with the landlord serving the tenant with a proper eviction notice. The Act says that after the agreement of purchase and sale, this notice is deemed to be given by the landlord to the tenant on behalf of the purchaser.
- The tenant must get 60 days to move out.
- The tenancy termination day must be at the end of the rental agreement. It means the last day of a month if the rental period starts on the first and ends on the last day of a month.
- The tenant has no obligation to move out if s/he believes the notice is groundless or in “bad faith.”
- The landlord needs to fill the notice out properly. Otherwise, you may find yourself in a situation when your eviction the Board dismisses your eviction application. The Board exercises a strict approach to the validity of the eviction notice. Eventually, you may be forced to start over. It is especially problematic in view of the closing date coming up. A new notice has to give the tenant another two months to move out.
Eviction application
- If the tenant does not move out within the time set in the notice, the landlord can file an application to evict the tenant with the Landlord and Tenant Board. Additional documents filed include:
- A copy of the eviction notice,
- Document certifying proper service of the notice.
- The purchaser’s affidavit that she/he needs the property for his/her own needs.
Hearing
- Upon receiving a properly completed application, the Landlord and Tenant Board sets the date of hearing for the application and issues a Notice of Hearing.
- The hearing is the most complex part of the procedure. The Landlord and Tenant Board do not issue an eviction order unless the landlord proves that she/he gave the Notice to Terminate the Tenancy in good faith. The evidence to prove may vary depending on each situation. It is crucial to make the best possible case at the hearing.
Compensation
The most recent legislative development commands the landlord to pay the tenant compensation for eviction based on this ground. The amount of compensation is equal to one month’s rent. The Board would not evict the tenant if the landlord did not give this compensation.
The eviction process based on the grounds that the buyer needs the property for his/her personal needs is pretty complicated. The landlord must follow strict procedural rules. She or he must be very persuasive at the hearing.
The landlord must meet a high test to prove that his/her eviction request isn’t frivolous. In addition, the stakes are high – if the tenant isn’t evicted, the closing date may not happen, or the deal is off altogether. That, I’m sure you can appreciate, leads to significant hassles and expenses. Given the complexity and importance of the situation, we recommend retaining a paralegal. Please feel free to contact us for an assessment of your case.
