# Selling a triplex - buyer wants it vacant



## junkedBrian (Apr 4, 2012)

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_Information/STEL02_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.


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## OhGreatGuru (May 24, 2009)

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.


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## Charlie (May 20, 2011)

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.


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## junkedBrian (Apr 4, 2012)

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.



OhGreatGuru said:


> 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.


charlie said:


> 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


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## Homerhomer (Oct 18, 2010)

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.


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## junkedBrian (Apr 4, 2012)

Homerhomer said:


> 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.


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## Just a Guy (Mar 27, 2012)

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.


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## junkedBrian (Apr 4, 2012)

Just a Guy said:


> 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!


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## Just a Guy (Mar 27, 2012)

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.


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## lewin (Jan 10, 2011)

Just a Guy said:


> 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.



Just a Guy said:


> 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.


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## Just a Guy (Mar 27, 2012)

You're misunderstanding me... My first quote was a reason why the buyer would want the place vacant. My second quote was for him to find if he has any legal, written terms, that may apply. This case is one reason why I think you should always have a written lease, in this case junkedBrian wasn't taking being a landlord seriously and has run into problems because of it. Being a landlord is a job, and shouldn't be treated like a hobby. He may lose the sale because of it, but a little searching may turn up an option for him, if not, he's at the mercy of his tenants...and the law is skewed enough that way already.


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## junkedBrian (Apr 4, 2012)

Just a Guy said:


> You're misunderstanding me... My first quote was a reason why the buyer would want the place vacant. My second quote was for him to find if he has any legal, written terms, that may apply. This case is one reason why I think you should always have a written lease, in this case junkedBrian wasn't taking being a landlord seriously and has run into problems because of it. Being a landlord is a job, and shouldn't be treated like a hobby. He may lose the sale because of it, but a little searching may turn up an option for him, if not, he's at the mercy of his tenants...and the law is skewed enough that way already.



It's a little presumptuous of you to say that I'm not taking being a landlord seriously, I suppose the lack of a lease might suggest that however given our situation we were not able to obtain a prior lease or have the tenants sign new ones. When we purchased the home the tenants were already on month to month, we made an attempt at signing a new lease with both tenants, but neither felt there was a need or any benefit for them to sign one, and really there wasn't. If we did have a lease there's nothing I could have put in writing that would allow me to circumvent the Ontario Residential Tenancies act. Keep in mind the one tenant has lived in the building since the 1960's, and ownership has changed hands a half dozen times, I very much doubt I would be able to locate the original lease even if it were useful.


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## Just a Guy (Mar 27, 2012)

No offence intended. That being said, I think this clearly illustrates a need and a benefit to having a lease, especially if it had a termination clause for the month to month continuity. My original advice of being nice and hopefully they'll understand may be your only recourse...does ontario have a cap on the amount you can increase rent? You may be able to raise it enough to encourage them more...


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## junkedBrian (Apr 4, 2012)

Just a Guy said:


> No offence intended. That being said, I think this clearly illustrates a need and a benefit to having a lease, especially if it had a termination clause for the month to month continuity. My original advice of being nice and hopefully they'll understand may be your only recourse...does ontario have a cap on the amount you can increase rent? You may be able to raise it enough to encourage them more...


oh we've got a cap alright, last year it was 0.9% this year it's (I believe) 3.2%. We don't raise rents until November 1st (original purchase date). I know the McGuinty government was pushing for 2.5% as the new max, not sure if that went through. A lease would be good but even if it did say "you have to move out at the end of the lease" they could decide not to, and unless I needed the apartment for myself, renovations, demolishing the building or a few other specifics, it would hold up with the landlord/tenant board. Tenants have quite a few rights in Ontario, regardless of any written agreements you might have. After my original post I've done quite a bit more research, and it looks like the best I can offer a buyer is that I will serve notice to the tenants, but will not guarantee anywhere that the apartments will be vacant, if the tenants choose not to move out, and the new landlord is infact doing renovations (no doubt in my mind they have to) then they'll at least have the 60 days notice I provided, if not, well they've got 2 tenants that won't be paying market rents same as me. Thanks for the input everyone.


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## Just a Guy (Mar 27, 2012)

I do share your pain, I've had tenant problems myself, and you are right that a lease is only paper...that being said, many people when faced with eviction will leave willingly...not many know the system or how to use it to their advantage. If they do though, you're in for a tough fight.


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## Mall Guy (Sep 14, 2011)

not sure how many replies you have had to your OP . . . but sorry, in real terms . . . "your screwed" . . . just wait for the media to gets hold of this, property will be unsaleable . . . think you need to find a new buyer, who can play the waiting game. 

There is a story about a tenant in Paris (where they have tenure) . . .she out lived 3 or 4 landlords !


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## Four Pillars (Apr 5, 2009)

It seems to me that the ball is really in the buyer's court. The seller (OP) can't get rid of the tenants so it's really up to the buyer if they want to try their luck with getting rid of the tenants.

I don't see how the OP could have handled anything differently. In Ontario, buyers really shouldn't be asking the sellers to evict tenants - it's just not realistic.


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## Berubeland (Sep 6, 2009)

Once the property is sold there is a rather simple form that the seller fills out asking for vacant possession. It might be hard to explain why the buyer needs vacant possession of two apartments...but that is not your problem. 

In fact recently in one of my searches on Canlii I came across a Divisional Court Ruling where the previous tenant sued the seller because the seller gave notice in bad faith. (Giving notice to raise the rents and renovate would qualify as this) The tenant lost because it was stated that you the seller have no way to predict the future and guess what the buyer of your property will do.


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## junkedBrian (Apr 4, 2012)

Thanks for all the replies everyone.

We've had a ridiculous amount of interest in the first 2 weeks on the market, but no firm offers. It's only been 2 weeks.. but we're starting to (probably should have done this way before) look at some other options such as keeping the property, taking a $200-300 a month loss, leveraging some of the equity and buying ourselves a new place. I think long term it makes more sense, especially with 2 solid (albeit way under market) tenants who don't ask for much. The property will only go up in value, and if we can still get ourselves something a little bigger it might be worth while.


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## phrenk (Mar 14, 2011)

junkedBrian said:


> The property will only go up in value.


Says who ? That's a dangerous assumption, especially if there hasn't been any significant renovations in the triplex for decades.


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## Cal (Jun 17, 2009)

Is the home sale transaction completed? How does it address these issues. What does your agent recommend?

Were I the buyer I would have all of these issues addressed. 90 day close to ensure time for you to give 60 days notice (wanting a copy of it is writing)as well as ensuring that the tenants are out on time or the deal doesn't close.


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