5 Mistakes Realtors Make When Dealing with Tenanted Properties
Tenanted properties carry legal complexity that’s easy to underestimate. These five mistakes come up again and again, and each one can cost a client time, money or a closing.
Key points
- Know the tenancy before listing: lease type, rent, deposits and any LTB matters.
- Don’t promise vacant possession on a timeline the law can’t deliver.
- Advice on notices and tenant rights is legal advice.
- Buyers inherit the tenancy, including the rent and the tenant’s rights.
Most problems with tenanted listings start before the property hits the market. Here is what to avoid.
1. Not knowing the tenancy
Before listing, confirm whether the lease is fixed-term or month to month, the current rent, when it was last increased, whether a rent deposit was collected and whether any LTB applications are open. Check whether the unit is exempt from the rent increase guideline. These details affect value and what options exist.
2. Promising vacant possession without a plan
An N12 needs at least 60 days’ notice ending on the last day of a rental period, and a hearing if the tenant stays. A purchaser N12 only works for a complex with three units or fewer, or a condo unit. A 30-day close with vacant possession usually isn’t realistic without a signed N11.
Listing a tenanted property? Book a free 20-minute call before you set the closing date.
Book a free 20-minute call →3. Giving legal advice
Telling a client which notice to serve, how much to offer the tenant or what the tenant’s rights are is legal advice. If it’s wrong, the client pays for it. Refer them to a licensed paralegal or lawyer.
4. Weak conditions in the offer
If vacant possession matters, the agreement should deal with what happens if the tenant doesn’t leave by closing. Without that, the buyer may have to close with the tenant in place. A real estate lawyer should review those terms.
5. Assuming the buyer understands
Buyers inherit the tenancy, the current rent and the tenant’s rights. They can’t require a new rent deposit if the tenant already paid one. If they plan to move in, they must genuinely do so, or face a bad-faith claim.
Frequently asked questions
What should a realtor confirm before listing a tenanted property?
Lease type, rent, last increase date, rent deposit, whether the unit is guideline-exempt and any open LTB matters.
How long does an N12 take?
At least 60 days’ notice, plus a hearing if the tenant doesn’t leave.
Can a purchaser N12 be used for any building?
No. Only for complexes with three or fewer units, or condo units.
Is advising on N12s legal advice?
Yes. Refer clients to a licensed paralegal or lawyer.
Does the buyer inherit the tenant?
Yes, on the same lease terms and rent.
About Robert Di Lisi
Robert is a paralegal licensed by the Law Society of Ontario and co-founder of Stonegate Legal Services, a landlord-only firm. He leads client intake and speaks at landlord seminars across the GTA. Like the rest of the team, he is a landlord himself.
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