Tenanted properties are a regular part of Ontario real estate — but they carry legal complexity that many realtors underestimate. The mistakes made in these transactions can be costly for the client and expose the realtor to complaints and liability. Here are the five most common ones.
1. Not Confirming the Tenancy Terms Before Listing
Before listing a tenanted property, the realtor should know: is the lease fixed-term or month-to-month, what is the current rent, was a last month’s rent deposit collected, and are there any active LTB applications. These details affect pricing, disclosure obligations, and what options exist for vacant possession.
2. Promising Vacant Possession Without a Legal Plan
Realtors sometimes include a vacant possession condition on an APS without understanding how long it actually takes to deliver. An N12 requires 60 days notice and LTB processing time if disputed. A cash-for-keys negotiation may take weeks. Promising a 30-day close with vacant possession is setting the client up to fail.
3. Advising the Client on How to Handle the Tenant
Realtors are not authorized to give legal advice on landlord-tenant matters. Advising a client on whether to serve an N12, how much to offer for cash for keys, or what the tenant’s rights are is legal advice. If that advice is wrong, the consequences land on the client — and potentially on the realtor.
4. Not Building Proper Conditions Into the Offer
Failing to include adequate tenant-related conditions in the APS — such as a condition allowing the purchaser to walk if the tenant contests the N12 — leaves the buyer exposed. If vacant possession cannot be achieved and there is no condition to protect the buyer, closing under a tenanted arrangement may be the only option.
5. Assuming the Purchaser Knows What They Are Getting Into
Many purchasers who buy tenanted properties do not fully understand that they are inheriting the tenancy, the existing rent, and all tenant rights under the RTA. Making sure the purchaser is informed — and connected with a paralegal before closing — is part of good client service.
What Comes Next
Stonegate works with realtors and their clients on tenanted property transactions. Book a free call at https://calendly.com/stonegatelegalservices/20min.
▶ Watch: Top 5 Realtor Mistakes When Selling Tenanted Properties in Ontario
Ready to talk to a landlord paralegal?
Stonegate Legal Services handles landlord-only matters across Ontario. Flat fee. Free discovery call.
