What to consider when buying a Tenanted Properties

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Navigating Tenant Situations When Buying a Property: What You Need to Know

When considering a property purchase with existing tenants, understanding your rights and responsibilities is paramount. Here’s a detailed breakdown of various tenant scenarios to guide your decisions:

Situation #1: Tenant with Existing Lease

When buying a property with an active lease, you inherit the tenant, lease terms, and rental rate until the lease expires. Attempting eviction before the lease ends is futile. To move in after the lease concludes, serve a 60-day notice before the lease’s end, adhering to the Notice for Landlord’s Own Use form. If the tenant agrees to leave early, secure the Agreement to Terminate the Tenancy, from them. Ensure these details are included in the Agreement of Purchase and Sale.

Situation #2: Month-to-Month Tenancy After Lease Ends

If the tenant is on a month-to-month arrangement after the original lease concludes, you can request the current owner to serve a 60-day notice on your behalf, using the N12 form. To avoid assuming tenancy, coordinate your closing date with the notice period.

Situation #3: Handling Below-Market Rent Tenants

Owners cannot legally evict tenants paying below-market rent without due process. False claims lead to severe penalties. Negotiations are an option, but tenant agreement isn’t assured. Any claims about owner occupancy must be genuine, as the Landlord Tenant Board is strict on false claims.

Situation #4: Dealing with Departing Tenants

Ensure clarity on the departure date before making an offer. The Agreement of Purchase & Sale secures vacant possession, eliminating the need for additional notices.

Situation #5: Retaining Current Tenants

For properties with leases extending, tenant details and lease terms must be in the Agreement of Purchase and Sale. Prepaid rent deposits and interests transfer to you upon closing. Post-lease, a month-to-month tenancy begins. New leases can be initiated, and rent hikes require a 90-day notice..

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