Ontario seller guide · Landlords
Selling a tenanted house in Ontario
Updated July 27, 2026The short answer: Yes, you can sell a tenanted house in Ontario — but you can't end the tenancy just because you're selling. The lease, the deposit and any arrears transfer to the buyer on closing, and the tenant's rights continue unchanged.
The rule that surprises most landlords
Under Ontario's Residential Tenancies Act, a sale does not end a tenancy. The buyer steps into your shoes as landlord: same lease, same rent, same last month's rent deposit (which you credit to the buyer on closing), same open LTB files. "I'm selling" is not, by itself, a lawful ground to evict anyone.
The three ways sellers actually handle it
1. Sell with the tenant in place
Simplest legally, hardest at retail. Showings must be scheduled with 24 hours' written notice, tenants aren't obligated to stage or tidy, and most retail buyers want vacant possession their lender will finance. The natural buyer for a tenanted property is an investor who underwrites the actual rent roll — which is why tenanted houses often trade below comparable vacant ones on the open market.
2. A voluntary agreement to end the tenancy (Form N11)
You and the tenant can mutually agree to end the tenancy on a chosen date using an N11. It's entirely voluntary on both sides — and in practice it's often paired with compensation ("cash for keys"). Done respectfully and documented properly, it's legal and common; done with pressure, it invites an LTB bad-faith claim. Get the agreement in writing and let your lawyer or paralegal paper it.
3. A buyer who genuinely intends to move in (Form N12)
If a buyer of a property with three or fewer residential units requires it for their own or their close family's residence, the seller can serve an N12 on the buyer's behalf — with at least 60 days' notice to the end of a rental period, one month's rent in compensation, and, for a month-to-month tenancy only. A tenant on a fixed-term lease is entitled to stay to the end of the term. The occupancy requirement is real: bad-faith N12s draw significant LTB penalties, and the person named must actually live there for at least a year.
What about tenants who aren't paying?
Arrears don't change the sale rules — they transfer with the building. An open L1/L2 application can continue, but LTB timelines are long, and many owners decide the carrying cost of waiting exceeds the discount of selling to a buyer who'll take the file over. That's a math decision, not a legal one; run both numbers before choosing.
Where a direct sale fits
Companies like ours buy tenanted properties as they stand — tenant, arrears, LTB file and all — because we underwrite the building rather than the vacancy. That certainty is what you're trading price for. Whichever route you take, don't let anyone (including a buyer) talk you into pressuring a tenant out unlawfully; the liability lands on the landlord of record.
Official resources: the Landlord and Tenant Board publishes every notice form and its rules, and Ontario's renting rights page covers the RTA in plain language.
Quick answers
Can I evict my tenant because I'm selling the house?
No. Selling is not a ground for eviction in Ontario. A tenancy can end by mutual agreement (N11), or a buyer of a small residential property who genuinely intends to live there can have an N12 served with 60 days' notice and one month's compensation — but the sale itself ends nothing.
What happens to the last month's rent deposit when I sell?
It transfers with the building — you credit it to the buyer on closing, and the buyer holds it for the tenant under the same rules. Interest obligations transfer too.
Do I have to tell buyers the property is tenanted?
Yes. The tenancy is a material fact and survives closing, so the agreement of purchase and sale must address it — vacant possession you can't lawfully deliver is a lawsuit, not a selling strategy.
This guide is general information for Ontario, current as of July 27, 2026 — not legal or tax advice, and not a substitute for it. Rules change and every situation differs; confirm your specifics with an Ontario lawyer (and accountant, where taxes are involved) before acting.