The tenancy survives the sale
Section 18 of the Residential Tenancies Act, 2006 makes the covenants in a tenancy run with the land. On closing, the buyer becomes the landlord on the same terms: same rent, same lease, same last month's rent deposit with the interest owing on it. A fixed-term lease runs to its end. Selling is not a ground to end a tenancy, and a lease clause that says otherwise is void.
That means the first decision is commercial: sell subject to the tenancy, to a buyer who wants the income, or offer vacant possession, which only works if the buyer qualifies under the Act and the dates allow.
Showings and the tenant's privacy
Section 27 lets you, or your brokerage with your written authorization, enter to show the unit to a prospective buyer on written notice given at least 24 hours ahead that states the reason, the day and a time between 8 a.m. and 8 p.m. The tenant does not have to leave, clean or agree to a lockbox, and you cannot penalise a tenant for being present or for declining an entry that was not properly noticed.
Repeated entries without notice interfere with the tenant's reasonable enjoyment and can lead to an order against you at the Landlord and Tenant Board. Agree a showing schedule with the tenant in writing; it usually gets more access, not less.
The N12 for a purchaser's own use
Section 49 allows a landlord who has signed an agreement of purchase and sale to give the tenant notice on the purchaser's behalf, but only if the building has no more than three residential units or the unit is a condominium, and only if the purchaser in good faith requires it for residential occupation by the purchaser, their spouse, a child or parent of either, or a caregiver for one of them. An investor who will re-rent cannot use it.
The termination date must be at least 60 days after the notice and fall on the last day of a rental period or fixed term. Under section 49.1, as of September 2026, you must pay the tenant one month's rent or offer another unit they accept; that obligation stays yours after closing. The tenant may leave earlier on ten days' notice.
If the tenant does not move out
An N12 is a notice, not an eviction. If the tenant is still in the unit after the termination date, only the Landlord and Tenant Board can order them out, on an application filed with the purchaser's sworn affidavit that they genuinely intend to occupy. Hearings take time and the Board can refuse the application if it doubts the purchaser's good faith.
Your sale agreement has to say what happens if possession is not vacant on closing: an extension, a price adjustment, or closing subject to the tenancy. Without that language you may be in breach of a promise you cannot keep, and the buyer may claim damages or refuse to close.
We draft that language into your agreement of purchase and sale, so you are never promising possession you cannot actually deliver.
Bad faith and its cost
Section 57 lets a former tenant apply to the Board within one year if the person named in the notice did not move in within a reasonable time after the tenant left. The Board can order the rent difference the tenant now pays, moving costs, a payment to the tenant and an administrative fine. Most of that risk belongs to the purchaser, but a seller who served a notice knowing the stated purpose was false is exposed too.
Keep the purchaser's written declaration of intent with your file, and do not serve an N12 on a buyer's say-so before the agreement is signed.
Drafting the sale around the tenant
Give the buyer a written summary of the rent, the deposit and interest, the lease term and any outstanding issues, and where possible have the tenant confirm it. If the buyer is assuming the tenancy, the agreement should assign the lease and adjust rent and deposit on closing. If vacant possession is promised, set the closing date to allow for the 60-day notice from the date the agreement becomes firm, and add a clause for a tenant who has not left.
A voluntary N11 agreement with the tenant to end the tenancy on a chosen date, sometimes with a payment, is lawful if it is genuinely voluntary.
Your steps
Who's involved
Keeps every right under the Act through the sale, including notice for showings and the right to a Board hearing.
Decides any eviction application after an N12 and any claim that the notice was given in bad faith.
Inherits the tenancy, or signs the declaration of intended occupancy that supports the N12.
Drafts the tenancy or vacant-possession clauses, adjusts rent and deposit and manages the closing risk.
Documents you will need
Tools for this stage
Answer six questions about the home and get a disclosure list sorted into what the law requires, what protects the deal, and what you may keep to yourself. It is a starting point, not legal advice on what to disclose.
TimelineWhen does each step of my sale happen?Enter the closing date of your sale to see when the offer, the conditions, the signing and the money fall, and how a same-day or staggered purchase fits around it. Treat the dates as typical, not fixed.
Guides to download
Questions people ask
Can I end the tenancy because I am selling?
No. Selling is not a ground for termination under the Residential Tenancies Act, 2006. The tenancy passes to the buyer. The only sale-related route is the purchaser's own-use notice under section 49, which has its own conditions.
Can the buyer serve the N12 after closing instead?
Yes. Once the buyer is the landlord they may give their own notice under section 48 for their own or a family member's use, with the same 60-day rule and one month's compensation. Whether that suits the buyer is for the buyer to decide.
The tenant is on a fixed-term lease. Does that change things?
The termination date in an N12 cannot be earlier than the end of the fixed term. If the lease has a year to run, vacant possession cannot lawfully be delivered before then, whoever the buyer is.
Do I have to pay the tenant to leave?
When you serve an N12 on a purchaser's behalf, section 49.1 requires you to pay one month's rent or offer another acceptable unit. Any larger payment for an early voluntary departure is a private N11 agreement, and it must be genuinely voluntary.
What if the tenant refuses showings?
A tenant cannot block an entry that was properly noticed under section 27, and you may apply to the Board if entries are obstructed. Do not force entry or change the locks; that creates a claim against you and can cost you the sale timeline.
Does the buyer get the tenant's deposit?
Yes. The last month's rent deposit and the interest owing on it pass to the buyer on the statement of adjustments, because the buyer takes on the obligation to apply them at the end of the tenancy.
Also in this centre
Read more
Related centres
Other Learning Centres for the same transaction.
What happens between deciding to buy and settling into an Ontario home: budget and pre-approval, the search, the offer and its conditions, financing and inspection, closing day and the first year, with the legal layer explained at every step.
Related centreThe Mortgage CentreWhether you are qualifying for a mortgage, closing, renewing, refinancing, breaking it early or falling behind: how it works in Ontario, what the law requires at each step, and what a lawyer does along the way.
Sources
- Residential Tenancies Act, 2006
- Landlord and Tenant Board: forms, filing and fees
- Renting in Ontario: your rights
General information about Ontario law as of 5 September 2026, not legal advice. It does not create a lawyer–client relationship.
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