What to do if the property you are purchasing has a tenant

Posted on: Tuesday, September 11th, 2012

In a file that I recently encountered I made a suggestion for an amendment to the agreement of purchase and sale due to the fact that there was a tenant at the property in question. If you are making an offer on a property that has a tenant, even if you have been told the tenant will be moved out before the closing date, it is advisable to insert the clause set out below to ensure you do not inherit the problem on closing but rather are free to move on. This is important because there are many “unscrupulous residential tenants”, as discussed in a recent case D’Amico v. Hitti, 2012 ONSC 4467, who will try to extend the amount of time that they vacate their rental property by engaging in improper conduct that abuses the process of the justice system. This case will be further discussed in upcoming newsletters.

The clause that should be inserted is as follows:

This Offer is conditional upon the Seller being able to provide vacant possession on the Completion Date. If on the Completion Date the tenant has not vacated the premises, this Offer shall be null and void and the deposit shall be returned to the Buyer in full without deduction. Upon notification by the Seller to the Buyer that the tenant has vacated the premises this condition shall be deemed waived and the Offer shall be firm and binding provided this is the last condition to be fulfilled. This condition is included for the benefit of the Buyer and may be waived at the Buyer’s sole option by notice in writing to the Seller.

It is important to address this matter in the agreement of purchase and sale in order to avoid potential problems getting rid of the tenant in the future. You can also check out my blog and/ or the July 2012 newsletter which contains an article on what to do when the property you are purchasing has a tenant. The blog (which also contains a link to the July Newsletter) can be accessed by clicking here.

The content of this blog is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

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