Obligations of the Landlord selling a tenanted property

Showing rented property has its
issues

If you are thinking of selling your
home this year and a tenant
currently occupies it, then I
recommend that you end the
tenancy before putting your home
on the market.

Let's look at your obligations and
rights as a landlord if you are trying to sell your home today and it is occupied by
tenants.

You have to give the tenant at least 24 hours' notice before you can show the home to a
prospective buyer.

You can only show the property between 8 a.m. and 8 p.m.

You cannot prevent the tenant from being present when the property is being shown to or
inspected by buyers.

You may be liable for damage claims if your tenant states that buyers either damaged or
stole some of their belongings.

You cannot give notice to terminate the tenancy until you have a signed agreement of
purchase and sale with a buyer.

You have to give your tenant 60 days' notice to vacate.

If your tenant does not vacate, you are looking at a tenancy board application that could
take an additional two months.

Most owners will want to properly "stage" their home for potential buyers. This will
involve making some minor repairs to the home as well as arranging the furniture and
contents to make the home show better.
Most experts in staging recommend that you
first de-clutter the home, remove oversized furniture and arrange the space to make it
most appealing to potential buyers. The problem is that as a landlord, you have no right
to order your tenant to de-clutter their rental space. Many tenants may deliberately try
and make the home look messy or say negative things about the home during any home
visit to discourage potential buyers from putting in offers.

Most interested buyers will want to see your home almost immediately. They will not
want to wait for 24 hours. There have been many instances where even when a landlord
ends the tenant's agreement before putting home up for sale.

Most buyers expect to receive and ask for an empty home on closing. If your tenant
refuses to leave, your deal may have to be extended, and if your buyer cannot make
arrangements for their financing to be extended, your entire deal could fall apart.

Not all tenants are disagreeable. If you have a good relationship with your tenant, you
can obtain the agreement from your tenant to perhaps waive their right to receive 24
hours' notice and just let potential buyers in when requested.
They may also co-operate to let you properly stage the home as well as make diligent efforts to find another place to live so that you will be able to give an empty home to your buyer. Yet in my experience, this is the exception, not the rule.

The best way to ensure that you will have no problems from any existing tenant is to pay
them an incentive to leave before you even put the property up for sale.
The amount of the incentive will vary, depending on how easy it is for the tenant to find alternate accommodation.

The guideline is about one month's rent or payment of all or part of the
tenant's moving costs.

I know that many sellers are against paying any incentive as a matter of principle. I
would remind sellers that it is not about the principle, it is about obtaining a higher sale
price for your home with much less stress.

By paying your tenant an incentive to leave before you put your home up for sale, you
can ensure that you will have no issue when:

Properly preparing or staging your home for sale.
Showing your home to prospective buyers at any time.
Obtaining an empty home on closing.