Posted by Maryann Quenet on Wednesday, September 17th, 2025 10:46am.
Selling an investment property in the Greater Toronto Area comes with a critical twist: you are not just selling bricks and mortar, you are selling a legal relationship with your tenant. Done right, you can protect your cash flow during the listing period, maintain a cooperative relationship with your tenant, and deliver either a turn-key, income-producing property to an investor, or vacant possession for an end-user buyer. Done poorly, you risk delays, complaints to the Landlord and Tenant Board (LTB), or even penalties for a “bad-faith” eviction. This guide walks you through everything you need to know so you can sell confidently in the GTA.
Your go-to decision tree looks like this:
Investor buyer likely? Consider selling with the tenant in place (you transfer the tenancy on closing), price the asset based on cap rate, and market the strength of the lease. In Ontario, selling does not, by itself, end a tenancy; the buyer steps into the landlord’s shoes and the lease continues under the same terms.
End-user buyer likely? Plan for vacant possession. In Ontario, the only sale-related path to end a tenancy is if the purchaser (or certain immediate family members) will move in and occupy the unit in good faith for at least one year, and even then strict notice, timing, and compensation rules apply.
In Ontario, the Residential Tenancies Act (RTA) governs the relationship. Listing or selling a property does not automatically end a tenancy. If the buyer will simply become the new landlord, the lease and all terms continue after closing.
Landlords (or an authorised real estate salesperson/broker) may enter to show the unit to prospective purchasers with at least 24 hours’ written notice, for a stated date and a time between 8 a.m. and 8 p.m. The notice must specify the reason for entry. Unnecessary or excessive notices can breach the tenant’s right to reasonable enjoyment. Keep it respectful and predictable.
Ontario’s law allows entry to show to buyers with proper notice; taking marketing photos is not explicitly its own ground. In practice, give 24 hours’ written notice for marketing access, avoid photographing sensitive personal items, and consider blurring identifying materials in MLS photos.
If your buyer intends to move in (or have an eligible family member do so), there are two lawful paths. Choose the one that fits your timeline, relationship with the tenant, and transaction strategy.
What it is: A mutual agreement to end the tenancy on a specific date, recorded on Form N11. It can be used at any time (even during a fixed term). It must be truly voluntary; you cannot require a tenant to sign.
How it’s used in practice: Many sellers offer respectful incentives (moving costs, flexible dates, professional cleaning, or a negotiated payment). “Cash-for-keys” arrangements are legal if voluntary, documented properly, and typically paired with a signed N11. Seek legal drafting or review.
Why landlords like it: A clear, cooperative timeline that aligns with your closing date, without the risks of a contested hearing.
If you have a firm Agreement of Purchase and Sale, you (as the current landlord) may serve Form N12 on behalf of the purchaser if they in good faith require the unit for their own residential use (or that of an eligible immediate family member) for at least one year.
Key rules:
Timing: The termination date must be at least 60 days after the notice is given, and it must fall on the last day of the rental period (or the last day of the fixed term). You cannot set a termination date earlier than the end of a fixed-term lease.
Compensation: You must pay the tenant an amount equal to one month’s rent before the termination date, or offer another acceptable unit. If compensation is not paid in time, the notice is void.
Affidavit & good faith: The purchaser must swear an affidavit confirming they genuinely require the unit as a principal residence for at least a year. Bad-faith terminations carry serious consequences.
Property type limit: “Purchaser’s own use” under the RTA applies only in certain circumstances, including where the residential complex contains three or fewer residential units, or to a condominium unit. Confirm applicability with your lawyer.
Early move-out right: After receiving an N12, the tenant may choose to leave earlier than the termination date by giving at least 10 days’ notice. Plan for this to avoid a gap.
An N12 is not an eviction order: If the tenant does not leave by the termination date, you must apply to the LTB (Form L2) and obtain an order at a hearing before the Sheriff can enforce. Build that possibility into your timeline.
Serve N12 only after you have a firm APS. Ontario recognises the purchaser’s need to occupy once there is an executed purchase agreement; your ability to serve N12 on the purchaser’s behalf flows from that.
Match the N12 termination date to lease periods. Count 60 days to the end of a rental period (or to the end of the fixed term). Then set your closing after that date, with a cushion in case of LTB delays.
Include “vacant possession” language and remedies. Your lawyer can draft clauses making vacant possession a true condition and setting out remedies if the tenant does not vacate (for example, holdbacks). The LTB process, not self-help, controls if a tenant remains.
Use predictable blocks. Group showings (for example, weekdays 5–7 p.m., weekends 12–2 p.m.) and give 24-hour written notice with a clear window. This respects the tenant’s routine and meets the statute.
Keep “reasonable enjoyment” front-of-mind. Bombarding a tenant with excessive entry notices can cross into interference with reasonable enjoyment under RTA s. 22. Be professional, limit frequency, and communicate.
Be thoughtful with marketing. Let tenants know when photos will be taken, and avoid posting images that reveal sensitive personal information. Consider reserving photo rights in your lease; in any case, get buy-in and be courteous.
Ontario strengthened penalties for bad-faith N12/N13 terminations. If a landlord or purchaser serves notice but does not actually move in (or otherwise acts in bad faith), the LTB can order general compensation of up to 12 months of the former tenant’s last rent, plus reasonable moving/storage costs, rent abatements, and administrative fines. This is in addition to any other remedies the Board considers appropriate. Plan and act in good faith, and document everything.
For investors: Emphasise the in-place income, rent roll quality, and the tenant’s payment history. Provide copies of the lease, any amendments, and clear statements of last month’s rent deposit and any top-ups paid, so buyers can underwrite confidently. (Under the RTA, last-month deposits earn annual interest at the guideline rate; sophisticated buyers will ask.)
For end-users: Start the vacant-possession plan early. That may mean negotiating an N11 with respectful, market-appropriate incentives, or mapping a realistic N12 timeline that aligns with your closing date. Use the dates section above so no one is surprised.
Can I make the tenant leave because I am selling?
No. A sale alone is not grounds to terminate. Only a purchaser’s good-faith own use, strictly following the N12 process and timelines (or a voluntary N11), can end the tenancy for a sale.
Can I show the unit whenever I want?
No. You must give at least 24 hours’ written notice, specify date and a time between 8 a.m. and 8 p.m., and state the reason. Excessive or harassing notices may breach the tenant’s rights.
If I serve an N12, is the tenant automatically evicted?
No. An N12 is only a notice. If the tenant does not leave by the termination date, you must apply to the LTB (Form L2) for an order, and only the Sheriff can enforce an eviction.
What if the tenant wants to move out sooner after receiving N12?
They can give at least 10 days’ notice and move earlier than the termination date.
Ontario has deliberate, tenant-protective rules around selling a tenanted property. If you need vacant possession, follow the N11 or N12 paths precisely. If you are selling to another investor, highlight the strength of the tenancy and keep the relationship collaborative. Either way, good-faith communication and careful paperwork are your best allies — and they keep you clear of the heavy penalties associated with bad-faith terminations.
Ready to Sell in the GTA? Work With The Johnson Team - one of the top-performing teams in the Greater Toronto Area known for market insight, creative marketing, and a client-first approach. Whether you are selling a tenanted condo in Mimico or an income triplex in The Junction, we bring negotiation strength, regulatory know-how, and proven systems to keep your transaction on track.
If you are ready to start, contact The Johnson Team and connect with an agent today. Let’s map your best next step in the GTA market, and get you moving with confidence.