Selling a Tenanted Property in Ontario: Can You Make the Tenant Leave?

Quick Answer

Sale alone ≠ eviction: lease transfers to buyer

N12 only if buyer needs it for own use

60 days notice, ends on period’s last day

One month’s rent compensation

Buyer must occupy ≥1 year or face penalty

A sale by itself does not end the tenancy — the lease transfers to the buyer

This is the first principle of selling a rental in Ontario: under the RTA 2006, when the property changes hands the existing tenancy transfers automatically to the new owner. The buyer becomes the new landlord and inherits every term of the lease — the rent, the last month’s rent deposit, the remaining term, and all of the tenant’s rights stay exactly the same.
In other words, the fact that an owner wants to sell, or has even signed a purchase agreement, is not on its own a lawful reason to make the tenant move. The tenant has no obligation to leave simply because the property is on the market.

The only exit: buyer’s genuine personal use, via an N12 under s.49

The single legal route to require a sitting tenant to leave on a sale is RTA section 49 (s.49): where the buyer, or the buyer’s spouse, child or parent, in good faith requires the unit as their principal residence, the current landlord (the seller) serves the tenant an N12 notice — “Notice to End your Tenancy Because the Landlord, a Purchaser or a Family Member Requires the Rental Unit.”
The operative words are “in good faith.” The buyer must genuinely intend to live there, not use “personal use” as a pretext to empty the unit and re-rent or re-price it. The LTB scrutinizes exactly this in Interpretation Guideline 12.

The N12 requirements: 60 days, period-end date, one month’s rent

A valid N12 must satisfy three hard requirements at once:

• At least 60 days’ notice: the termination date must be at least 60 days after the notice is given.
• End of a rental period: the termination date must fall on the last day of a rental period (month-end for a monthly tenancy), and for a fixed term, on or after the end of the term.
• One month’s rent compensation: under s.49 the current landlord must compensate the tenant an amount equal to one month’s rent on or before the termination date, or offer another rental unit acceptable to the tenant. Note: the obligation to pay belongs to the landlord who served the notice (the seller), not the buyer.

If the tenant doesn’t leave: go to the LTB, never self-evict

An N12 is a notice, not an eviction order. If the tenant is still there on the termination date, the landlord cannot change the locks, cut utilities, or remove belongings — all of that is illegal. The correct step is to file an L2 application with the LTB and let an adjudicator decide.
Timing matters: the L2 must be filed within 30 days of the N12 termination date (RTA s.69(2)), or you start over. LTB scheduling often runs into months — which is precisely why the “sell tenanted vs. sell vacant” decision has to be planned early.

The cost of a bad-faith N12: buyer must actually move in

The law comes down hard on fake personal-use claims. If the buyer takes vacant possession but does not genuinely move in — or fails to occupy for the required period — the former tenant can apply to the LTB for remedies. The Board can order fines plus compensation for the tenant’s moving costs and rent differential. Provincial fines under the RTA can reach up to $25,000 for an individual.
Practical takeaway: as a seller, make sure the buyer’s intent is real; as a buyer, after an N12 keep proof of occupancy (address change, utility bills, insurance) so a former tenant can’t credibly allege bad faith.

Fixed-term vs. month-to-month: it decides how fast you get vacant possession

The type of tenancy drives the timeline directly:

• Unexpired fixed term: even for the buyer’s own use, an N12 termination date generally cannot be earlier than the end of the fixed term. A buyer who needs to move in soon may have to wait out the contract.
• Month-to-month: far more flexible — as long as you meet the 60-day, period-end requirement, you can move in roughly two-plus months out.

So a rental with, say, 10 months left on a below-market fixed lease forces both the seller and a prospective owner-occupant buyer to build that into the closing timeline.

Seller strategy: list tenanted or deliver vacant?

Each path has trade-offs that hinge on your target buyer:

• Selling tenanted: the buyer inherits the tenant and the cash flow — ideal for an investor. Upside: no eviction, clean close. Downside: if the rent is below market or the tenant is hard to schedule showings with, it can suppress price and shrink the buyer pool.
• Vacant possession: usually sells to owner-occupants at a higher price, but you must first have a signed buyer and that buyer must run the N12 — adding time and uncertainty. If the tenant contests, the closing date can slip.

Practical advice: gauge the rent-vs-market gap and tenant cooperation first, then choose the listing approach, and write the N12 timeline into the closing and condition clauses of the Agreement of Purchase and Sale.

Showing access while listed: 24 hours’ written notice, in writing

While the unit is rented and occupied, the landlord does not have an unrestricted right to walk in with buyers. Under the RTA, a showing requires at least 24 hours’ written notice to the tenant, and must take place during reasonable hours (generally 8 a.m. to 8 p.m.).
The tenant must reasonably accommodate showings, but you cannot harass them with constant entry. Communicating early and giving the tenant reasonable accommodation — sometimes a modest cooperation incentive — usually protects the property’s presentation and sale price better than a heavy-handed approach.

Related Reading