When you own a rental property and decide it’s time to cash out, you don’t just pick up a megaphone and shout, “everybody out!” Tenants have rights. Done right, though, selling a house with tenants is an art form: equal parts marketing, negotiation and storytelling. Done wrong, it’s a nightmare that stalls deals, angers tenants, and scares away buyers. Let’s break it down.

Planning to sell your rental home in Barrie? Our Guide to Selling will help you stay on track.

What to Know Before You List

At a high level, selling a house with tenants in place is not unusual, but the lease doesn’t evaporate just because you’re handing over the keys. The fact is that leases live on even after you sell. While there are forms to end a tenancy, with names that sound like robot models (N11, N12), whether they apply or not depends on the specific circumstance. If there’s a fixed-term lease, the new buyer inherits it and must honour the terms until it expires. Once it does, the tenancy rolls over to a month-to-month. At this point the buyer can either renew, let the tenant stay on a monthly basis or decide to move in themselves and give notice.

A few key points:

• Selling a tenanted property in Ontario means working around showings and respecting the tenant’s privacy. You must give at least 24 hours’ notice for showings, which can only take place between 8:00 a.m. and 8:00 p.m.
• Tenants can’t be evicted simply because the home is for sale. The buyer must assume the lease until it ends.
• Communication and cooperation are crucial. Treat your tenants with respect, explain your plans and involve them in scheduling showings to keep the process smooth.
• The Tenants’ cooperation is very key. Assure them that their best foot forward in being ready and willing for showings will better ensure a great new, enthusiastic, and supportive Landlord.

A realistic estimate is essential to sell your home in any market. Find out what your property is worth by booking a free evaluation.

N11 vs N12: Know Your Options

When it comes to ending a tenancy, there are two primary forms in Ontario:

N11 Agreement to End the Tenancy

This is a mutual agreement between landlord and tenant to end the lease on a specific date. It’s often paired with compensation for the tenants when the landlord sells the property. This is commonly known as “cash for keys.”

Because it’s voluntary, tenants may ask for more than the statutory one-month rent compensation. This often depends on how long they’ve lived there and how far below market their rent is. Once signed, an N11 is hard to undo and gives buyers confidence that the unit will be vacant on closing day.

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• Riparian Rights: What to Know When Selling a Waterfront Home
• Patent Defect Vs Latent Defect: What Home Sellers Need to Know
• Should You Stage Your Home Before Selling?

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N12 Notice to End the Tenancy for Buyer’s Use

A common question that gets asked is: If you buy a house with tenants, can you kick them out? The answer is: Only under specific circumstances. An N12 is used when the buyer or landlord genuinely intends to occupy the home. It can only be served when the tenancy is month-to-month (or after a fixed term ends) and requires at least 60 days’ notice. The tenant is entitled to one month’s rent as compensation and can possibly dispute the notice with the Landlord and Tenant Board.

Bad-faith N12 notices carry stiff penalties- the buyer must actually move in and stay for at least a year.

Most seasoned Realtors encourage negotiating an N11 before listing. Especially if you want to stage the home and attract end-user buyers. An N12 means the property remains tenanted until closing, which can limit showings and reduce your buyer pool. Investors willing to assume a tenant might use the N12 clause and take on the risk themselves. Often, they ask for a price concession to reflect that risk.

Notice Periods & Tenant Rights

Selling a house with tenants requires landlords to follow specific timelines for giving notice and honour tenant protections:

• Showings: Provide at least 24 hours’ written notice before entering for a showing, appraisal or inspection. Showings are limited to reasonable hours (8:00 a.m. to 8:00 p.m.).
• Eviction for personal use: If the buyer intends to move in, they must serve an N12 with at least 60 days’ notice starting on the next rental period. Note that some types of evictions, like those for extensive renovations, require longer notice periods (up to 120 days) and different forms.
• Security of tenure: Existing leases remain in force, and tenants can’t be forced to sign a new lease or leave early. Their deposit transfers to the new owner.
• Privacy: Landlords may not photograph tenants’ personal belongings without consent. Overly frequent or disruptive visits are prohibited.
• Compensation: When tenants are asked to leave because the buyer is moving in, they’re entitled to at least one month’s rent or a comparable rental unit. Bad-faith evictions can lead to damages of up to a full year’s rent.

When Your Buyer Plans to Move In

Sometimes you aren’t selling to another investor. Instead, you’re handing off the keys to someone who’s going to call your house their home. Under Ontario’s rental laws, that’s allowed, but it’s not as simple as “I’m selling, see you later.” A buyer (or their spouse, parent or child) who genuinely intends to occupy the property can ask a tenant to leave, but only when they follow the rules.

• Three-unit maximum and a signed deal: The home must contain three units or fewer, and there must already be a firm agreement of purchase and sale. You can’t serve notice just because you’re thinking about listing.
• At least one year’s occupation: The buyer or their immediate family member must intend to live in the home for at least a year. That’s the good faith requirement.
• Timing the notice: Form N12 can only be used once a tenancy is month-to-month or when a fixed term ends. You have to give at least 60 days’ notice, and the termination date must line up with the end of a rent period or the end of the lease.
• A declaration or affidavit: Along with the N12, your lawyer files a declaration (sometimes called an affidavit) signed by the person moving in. It confirms they plan to make the home their own and is given to the Landlord and Tenant Board. Tenants can ask to see this document and even question the buyer about their plans at a hearing.
• Compensation and rights: The tenant is still entitled to compensation. Typically one month’s rent, and they can dispute the notice if they suspect bad faith or if the buyer doesn’t follow through.

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Tips for a Smooth Sale

In plain English, you can sell a single-family rental to an end-user. However, you need your paperwork and timeline to be buttoned up. Many sellers still prefer to negotiate an N11 so they can stage the home and give buyers vacant possession. If you do rely on an N12, build contingencies into your offer in case the tenant doesn’t move out on schedule. Also make sure your Realtor and lawyer are in sync on the process.

• Get your paperwork in order. Have a copy of the lease, payment history and any maintenance records ready. Buyers appreciate transparency.
• Build rapport early. Treat tenants with respect, and involve them in the process. A cooperative tenant can make or break a sale.
• Offer fair compensation. If you want an early exit via an N11, offer a package that reflects the tenant’s situation. Think beyond one month’s rent then consider moving costs and the difference between their current rent and market rent.
• Market to the right audience. For investors, highlight the stability of a good tenant and provide detailed financials. For end user buyers, consider negotiating an N11 so you can stage the home and appeal to a broader pool of buyers.
• Plan for delays. Even with proper notice, tenants can dispute an N12 and remain in the unit until their case is heard. Build flexibility into your sale agreement with contingency clauses for occupancy.
• Stay up to date. Ontario’s rental legislation evolves. Make sure you’re using the correct forms and timelines. Consult a real estate lawyer or paralegal if you have any doubts.

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Do you want to learn more about income properties? Check out these posts from our investor series:

• Benefits of Owning Revenue Properties
• Real Estate Investing in Canada
• How Does BRRRR Work for Barrie Real Estate Investors?

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Protecting Your Interests

We developed something at the Weeks Group as a strategy we call an escalation clause to protect our sellers in the event of hiccups. We are not willing to share that strategy as we keep it for our clients.

Selling a property with tenants is possible, and can even be profitable, when you handle it thoughtfully. Whether you’re selling a house with tenants to another investor or vacating it for an end user buyer, remember that the process is equal parts strategy, empathy and paperwork.

When in doubt, lean on an experienced Realtor who knows the ins and outs of tenant-occupied sales. With the right approach, you can turn a potentially stressful situation into a smooth transaction and maybe even a story worth sharing.

At the Weeks Group, we have been landlords ourselves for many years, so we walk the walk and invite you to have a conversation.

Whatever your next steps may be, our Barrie real estate agents are happy to help. Reach out to us today at 705.305.4174 or email hello@weeksgroup.ca to begin a conversation.