Selling a triplex - buyer wants it vacant

[junkedBrian]

Hello,

first post here, did some reading on some other threads and posts in here and found some good info, I've got a somewhat specific question:

We're selling our Triplex in a downtown Ontario city, we're owner occupied, meaning we live on the 1st floor, and have 2 more units above us that are occupied. One of the tenants is 84 years old, and has lived there for 40 odd years, the other tenant has been there for 5-6 years and is also month to month. As a result their apartments have not been renovated in 40+ years, and the amount they are paying in rent is about half of market value.

Our buyer has requested that we have the units all vacant (no problem for ours, we're happy to move out). The 2 tenants, from my understanding the buyer can request to have the apartments for personal use, or for renovations requiring permits which I read about here: http://www.ltb.gov.on.ca/en/Key_Info...02_111677.html

Other Reasons for Eviction:
- the landlord has agreed to sell the property and the purchaser wants all or part of the property for their own use or for the use of an immediate family member or a caregiver,
- the landlord plans major repairs or renovations that require a building permit and vacant possession,

Would I as the seller be providing notice to the tenants (60 days?), is there anything that the tenants would be able to do to prevent themselves from being evicted. If I do provide notice for the eviction, close on the house and they refuse to leave can my sale be compromised?

thanks for your input

b.

[OhGreatGuru]

If I were the tenant I would challenge this. You will notice the second paragrpah refers to the "landlord", not the "purchaser". You are the landlord. The purchaser doesn't become landlord until after he buys. You have no standing to defend the purchaser's claim that he intends to make major renovations.

[Charlie]

Your best bet may be to pay off your tenants. See if you can swing a deal for them to leave voluntarily. We had a landlord do this for us when he wanted to sell his place...Evicting a 84 year old tenant who's been there 40 yrs on the premise of a future buyer doing major renos (when you don't even know this is true) can't go well...plus the hassle / cost /time delay of a challenged eviction may exceed what they'd be willing to accept to move.

I suppose a determined tenant could take advantage of your intention here, and challenge anyways, but if they live in your home and you know them you should be able to gauge whether they'd live up to a deal. It worked for us...though not the advice a lawyer or property manager might give. I think he gave us 3 months rent (or something like that) plus was very polite and sympathetic when he came to discuss it and explain his situation. Had he just hit us with a legal document to vacate, we might have spent more time considering our legal rights.

[Homerhomer]

Regardless of the legal stuff and who can do what, I feel sorry for the 84 year old guy if he is forced to move out.

[junkedBrian]

Regardless of the legal stuff and who can do what, I feel sorry for the 84 year old guy if he is forced to move out.

So do I, I've been contacting elderly services in our city to see if there are some people that can help us / her out. It's sort of out of our hands, we purchased the home and realized we're in over our heads, and have no choice but to sell the house, we can't afford to keep it and buy another one and we can't dictate what the future buyer might do to the existing tenants. Although moving out might be tough for them, it also might be in their better interest long term as they are getting on in age to move in to a place with some care, or at least a ground floor unit / elevator access. Obviously that's not for me to decide, just pointing it out.

[junkedBrian]

Right, that makes sense. I think the wording on both my sale agreement and the eviction notice would have to be detailed and careful to note that the vacancy is not guaranteed, however we will provide the 60 days notice to the tenants, and in terms of the eviction notice have the change of "landlord" noted as an eviction notice from ourselves, and being passed on to the buyer who becomes the new landlord at x date. The purchaser can also simply state he wants the 2 apartments for himself/family and then do the renovations. You're right I have no way of defending the purchasers claim to renovations however I have no doubt that they will do renovations, as their intention is to purchase, renovate, double the rent to bring it to market value.

If I were the tenant I would challenge this. You will notice the second paragrpah refers to the "landlord", not the "purchaser". You are the landlord. The purchaser doesn't become landlord until after he buys. You have no standing to defend the purchaser's claim that he intends to make major renovations.

This seems like a good idea, however the older tenant is not on friendly terms with us, being there for so long I suspect she feels that she owns the building, even tho she is a renter. She is constantly sending us notes about the shared front hall, or noise, taking down decorations my wife may have put up etc. The other tenant I don't see being an issue of moving out at all, he suspects that he's moving out soon anyways. Morally it feels very wrong to evict someone of that age, but at the same time, she's getting close to the age where living in a 3rd floor apartment will not be safe, or probably already isn't.

Your best bet may be to pay off your tenants. See if you can swing a deal for them to leave voluntarily. We had a landlord do this for us when he wanted to sell his place...Evicting a 84 year old tenant who's been there 40 yrs on the premise of a future buyer doing major renos (when you don't even know this is true) can't go well...plus the hassle / cost /time delay of a challenged eviction may exceed what they'd be willing to accept to move.

I suppose a determined tenant could take advantage of your intention here, and challenge anyways, but if they live in your home and you know them you should be able to gauge whether they'd live up to a deal. It worked for us...though not the advice a lawyer or property manager might give. I think he gave us 3 months rent (or something like that) plus was very polite and sympathetic when he came to discuss it and explain his situation. Had he just hit us with a legal document to vacate, we might have spent more time considering our legal rights.

thank you both for your thoughts

[Just a Guy]

Often buyers don't want to "inherit" tenants as they don't know them/haven't screened them. In your case it sounds like they see a potential to increase the rents which is a valid reason for their request.

One of the things you don't mention is what your lease agreement with your tenants says. You should have a clause in your lease that may pertain to this situation.

I agree with Charlie though, be nice to them, explain the situation, and be helpful to them.

[junkedBrian]

Often buyers don't want to "inherit" tenants as they don't know them/haven't screened them. In your case it sounds like they see a potential to increase the rents which is a valid reason for their request.

One of the things you don't mention is what your lease agreement with your tenants says. You should have a clause in your lease that may pertain to this situation.

I agree with Charlie though, be nice to them, explain the situation, and be helpful to them.

We don't have lease agreements with the tenants, after 1 year on a lease they can move to month to month (afaik), and were both in place when we bought the place and already on month to month. The 84 year old was paying $50 a month rent when she moved in 44 years ago!

[Just a Guy]

Well, with the month to month do you have a termination option or is it at their option? What is your option to increase rent? It seems like you made a basic mistake when you became a landlord. Most month to month agreements allow for you to ask them to leave given 30 days notice...you need to find the original lease, the terms would be spelled out there.

[lewin]

Often buyers don't want to "inherit" tenants as they don't know them/haven't screened them. In your case it sounds like they see a potential to increase the rents which is a valid reason for their request.

I think the OP is in Ontario, where "current tenants are paying below market rate" is not a valid reason to evict someone.

Well, with the month to month do you have a termination option or is it at their option? What is your option to increase rent? It seems like you made a basic mistake when you became a landlord. Most month to month agreements allow for you to ask them to leave given 30 days notice...you need to find the original lease, the terms would be spelled out there.

Again, not in Ontario. Even on a month-to-month basis, tenants have security of tenancy which means they cannot be evicted except for specific prescribed reasons. "Landlord wants to move in" is an allowable reason but "Landlord wants tenants who will pay more" is not. Renovations is also an acceptable reason but there are many strings attached (e.g., provide long notice, give tenant right to return to unit).

ETA: Though the landlord can apply for a rent increase above the typical rate if unit improvements are made. Even with right of first refusal, the old tenant might decide the new rent is too much.