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Avoiding trouble when selling properties with tenants

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Here’s an article about how agents can avoid a mistake and a potential lawsuit when selling a property with a tenant.

In October 2020, we had a married couple contact our office regarding their landlord terminating their tenancy. They had been living in their unit for a little over a year and were happy and comfortable. They had no intention of moving any time soon.

However, their landlord, through his agent, contacted the tenants via email on June 26, 2020, and notified them that he was selling the unit. My clients told the agent that if the new buyers were willing to continue their tenancy, they would like to stay. After a few days the agent notified my client that the unit was sold and the new owners were going to move in. They had to move out by September 18.

My clients found another place and moved out on September 1, 2020. They felt a tremendous amount of stress, anxiety and pressure to move and give their family stability again. After a month, when my clients were looking at listings online, they came across their previous unit listed for rent. They were shocked. And at this point, they sought legal advice.

The landlord didn’t give the proper 60 days notice (N12 Notice) to our clients for them to move out, as per the lease agreement. Unfortunately, they didn’t know they were supposed to be served with a notice and had until the end of September to move out. Our clients had to move into another property and pay $300 more in rent plus additional utility costs. They deserved to get compensated for the undue financial hardship that was put on them due to the landlord’s actions.

A hearing was held earlier this month, November 2021. The tenants had their opportunity to explain what happened, what they went through and how the move had a terrible financial impact on their lives. The landlord’s representative tried to show the tribunal that the tenants are now financially well off and that that they could afford where they were living and they shouldn’t be compensated.

The problem with this particular argument is that he was overlooking the past year, when my clients were suffering financially, which is exactly why they deserved to be compensated. The first few months of becoming used to their new home, living arrangements, extra expenses and extra travel were all new factors to balance and make work.

The decision of the Landlord and Tenant Board was in favour of the tenants.

The order clearly stated Section 43 of Ontario’s Residential Tenancies Act sets out the required elements of a valid notice of termination, which in this case the landlord did not meet. The landlord did not serve the tenants with an N12 notice. In addition, had the landlord served the tenants an N12 notice, the earliest date for them to vacate the premise would have been September 30, 2020, or 60 days notice. The landlord’s excuse that he didn’t know about the N12 form wasn’t accepted by the board.

The adjudicator ordered the landlord to pay the tenants $4,070 by November 23, 2021. The landlord was also ordered to pay an administrative fine of $2,000.

The tenants are happy with the decision and so is our office. Landlords should be held responsible for their actions.

My real estate career encompasses 50 years as an agent very much like you. When I got my license, I worried that I may be inadvertently doing something wrong. I kept my record clean but I was always on the lookout for errors, omissions or mistakes and I have made plenty of them. Luckily I never got a letter from the Real Estate Council of Ontario.

The purpose of this article is to update agents on how to keep their names clean and avoid getting a letter from RECO or your real estate board. Since I’m an agent and a member of TREBB, I very much think like you. I consider myself a part of the real estate community even though my focus is law.

If you wish, you can contact me at any time for any legal question you may have regarding this article, or any other real estate legal matters may have. The good news? It won’t cost you anything.

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