Selling a property with a tenant in place is one of the most common situations where the N12 notice comes into play. But the process is not as simple as serving notice and waiting. There are strict legal requirements, and the consequences of getting it wrong affect both the vendor and the purchaser.
The Purchaser’s Own Use Ground
In a sale context, the N12 can be served on behalf of the purchaser — not the vendor — on the ground that the purchaser or a member of their family will be moving into the unit. The purchaser must be an individual, not a corporation, and they must genuinely intend to reside there.
Who Serves the N12 and When
The N12 can be served after a firm Agreement of Purchase and Sale is in place. It is typically served by the vendor on behalf of the purchaser. The timing matters: the 60-day notice period plus LTB processing time must align with the closing date, or vacant possession may not be achieved in time.
One Month’s Compensation Is Required
The tenant is entitled to one month’s rent in compensation for the N12. This must be paid on or before the termination date. The vendor and purchaser need to agree in their APS who is responsible for paying this compensation.
What Happens If the Tenant Disputes
A tenant who receives an N12 has the right to dispute it at the LTB. They can file a T5 application for bad faith after the fact. In the meantime, if they simply refuse to leave and file a dispute, the hearing could be scheduled months out — past the closing date.
Planning the Timeline Realistically
Vendors who want to deliver vacant possession need to start the N12 process immediately after a firm APS and build contingency time into the closing date. A 90 to 120 day closing window gives more room than 30 to 60 days. Discuss this with both your paralegal and your realtor before listing.
What Comes Next
Stonegate advises landlords and their realtors on N12 applications in the context of property sales. Book a free call at https://calendly.com/stonegatelegalservices/20min.
▶ Watch: Tenant Relocation When Landlords Sell: Understanding Your Rights
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