Can a Tenant Require a Landlord to Provide the Sale Details When a Landlord Is Selling a Property and Needs the Tenant to Move Out For Take Over By the Buyer?

A Tenant May Rightfully Request Full Disclosure of the Sale Transaction Details Including Selling Price When a Landlord Seeking Eviction of the Tenant For the Purpose of Selling to a Purchaser That States An Intention to Occupy the Rental Unit of the Tenant.

Understanding the Disclosure Requirements When Evicting a Tenant For Own Use By a Purchaser Includes Sale Details

Residential Notice of Eviction Document In the situation where a landlord is selling the property and the buyer of the property, or close family member of the buyer, wishes to to move in an occupy the property, the current tenant will need to move out; and accordingly, an eviction proceeding may be initiated so as to legally remove the tenant.

The Law

A landlord may commence eviction proceedings when a purchaser of the property, or a close family member of the purchaser, genuinely intends to reside within a rental unit occupied by a tenant. Subject to good faith intentions, among other conditions, the Residential Tenancies Act, 2006, S.O. 2006, Chapter 17 prescribes the right to evict a tenant for purpose of allowing occupancy of a purchaser whereas it is stated:

Notice, purchaser personally requires unit

49 (1) A landlord of a residential complex that contains no more than three residential units who has entered into an agreement of purchase and sale of the residential complex may, on behalf of the purchaser, give the tenant of a unit in the residential complex a notice terminating the tenancy, if the purchaser in good faith requires possession of the residential complex or the unit for the purpose of residential occupation by,

(a) the purchaser;

(b) the purchaser’s spouse;

(c) a child or parent of the purchaser or the purchaser’s spouse; or

(d) a person who provides or will provide care services to the purchaser, the purchaser’s spouse, or a child or parent of the purchaser or the purchaser’s spouse, if the person receiving the care services resides or will reside in the building, related group of buildings, mobile home park or land lease community in which the rental unit is located.

Same, condominium

(2) If a landlord who is an owner as defined in clause (a) or (b) of the definition of “owner” in subsection 1 (1) of the Condominium Act, 1998 owns a unit, as defined in subsection 1 (1) of that Act, that is a rental unit and has entered into an agreement of purchase and sale of the unit, the landlord may, on behalf of the purchaser, give the tenant of the unit a notice terminating the tenancy, if the purchaser in good faith requires possession of the unit for the purpose of residential occupation by,

(a) the purchaser;

(b) the purchaser’s spouse;

(c) a child or parent of the purchaser or the purchaser’s spouse; or

(d) a person who provides or will provide care services to the purchaser, the purchaser’s spouse, or a child or parent of the purchaser or the purchaser’s spouse, if the person receiving the care services resides or will reside in the building, related group of buildings, mobile home park or land lease community in which the rental unit is located.

Period of notice

(3) The date for termination specified in a notice given under subsection (1) or (2) shall be at least 60 days after the notice is given and shall be the day a period of the tenancy ends or, where the tenancy is for a fixed term, the end of the term.

Earlier termination by tenant

(4) A tenant who receives notice of termination under subsection (1) or (2) may, at any time before the date specified in the notice, terminate the tenancy, effective on a specified date earlier than the date set out in the landlord’s notice.

Same

(5) The date for termination specified in the tenant’s notice shall be at least 10 days after the date the tenant’s notice is given.

Good Faith Duty

As explained above, the process of evicting a tenant so to enable a buyer, or close family member of the buyer, among certain others, is a process that must be initiated in good faith where there is truly an intention of the buyer, or close family member of the buyer, or others, to move into, and reside within, the rental unit of the tenant. To enable the tenant, and the Landlord Tenant Board, to review whether the eviction process is engaged in good faith with a genuine intentions expressed regarding the needs of the buyer, the same basis of review that is used when determining whether a landlord genuinely intends to occupy the rental unit applies.  This consistency was stated within the case of J.B. and S.B. v. S.A.S. and D.A.TSL-76546-16 (Re), 2016 CanLII 71338 wherein it was said:

17.  Salter v. Beljinac, 2001 CanLII 40231 (ON SCDC), [2001] O.J. No. 2792 is the leading case involving a landlord’s own use application under section 48 of the Act. I find that the principle that was established in Salter can be applied to a purchaser’s own use application under section 49 of the Act. According to that case, the test of good faith is the purchaser’s genuine intention to occupy the premises and not the purchaser’s motives that influence that intention.

Disclosure of Details of Transaction

When a tenant challenges the eviction process on the basis that the purchaser lacks a genuine intent to occupy the rental unit, the tenant may rightfully request disclosure of all relevant facts regarding the transaction including the selling price. The right to review the sale details was stated by the Divisional Court within the Riddell v. Huynh, 2021 ONSC 4820 case where it was said:

[10]  In one area, however, the Board erred in law and the error gave rise to substantive unfairness to the tenant.  The critical issue before the Board was the bona fides of the purported sale from the landlord to her brother.  As a long line of cases before the Board shows, where the sale transaction is to a close family member, this is a warning sign, or flag, that the transaction may not be genuine.  In this case, the unit was not exposed to the open market.  No real estate agent was involved.  It was a private deal.  The agreement of purchase and sale was disclosed, but the price of the transaction was redacted.  The appellant requested a complete copy of this critical document.  This request was denied by the Board and no proper justification was given for denying this request.

[11]  This was no “fishing expedition”.  The price was one of the critical indicia to consider in determining the bona fides of the transaction.  So were payment terms and financial arrangements that were made to meet those payment terms.  Although the prior applications to evict the tenant for “personal use” did not give rise to an issue estoppel or res judicata, they did provide context for the dispute.  So, too, did the history of conflict, including evidence adduced by the tenant that the landlord had recently tried to impose another illegal rent increase and had threatened to sell the unit if the tenant did not accede to the improper demand for rent.  Just days after this, the landlord purported to agree to the sale to her brother.

[12]  There were many “alarm bells” that this was another attempt by the landlord to oust the tenant without a proper justification.  The tenant was entitled to test the evidence relevant to this issue, and this included full details of the sale transaction.  These were proper questions, the Board erred in disallowing them, and this error may have affected the outcome.  If the price and the payment arrangements did not reflect reasonable commercial terms, the inference that the transaction was not genuine would have become more and more irresistible.

[13]  On my reading the erroneous ruling respecting full disclosure of the terms of the sale transaction followed as an extension of the Board’s efforts to constrain the appellant’s conduct in the hearing within reasonable bounds.  The Board’s discretion is broad in respect to the conduct if hearings, but not so broad as to preclude a party from testing critical evidence on a key issue in dispute.

Summary Comment

Generally, when selling a property, a landlord may seek to evict a tenant where a purchaser, among other specific persons closely connected to the purchaser, genuinely intend to occupy the rental unit of the tenant; however, the tenant may challenge the eviction process in an effort to demonstrate a lack of genuine intent.  During this process, the tenant may request detailed specifics of the property purchase transaction such as the selling price, among other details.

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