Buying a tenanted property in Ontario does not automatically give you the right to move in. To evict the existing tenants, the seller must serve an N12 Notice on Behalf of the Purchaser. Even then, only the Landlord and Tenant Board (LTB) can legally enforce the eviction if the tenant refuses to leave, which can take months.
Purchasing an investment property or a new family home should be a thrilling milestone. However, when the property you are buying in Ontario is already occupied by residential tenants, the legal landscape becomes highly complex. Many first-time investors mistakenly believe that a change in ownership automatically terminates the existing lease. Under the Ontario Residential Tenancies Act (RTA), this is completely false. The lease simply transfers to you, making you the new landlord.
Whether you are buying a duplex in Toronto, a townhouse in Ottawa, or a single-family home in Hamilton, securing “vacant possession” requires strict adherence to legal procedures. 📍 Trying to force a tenant out illegally can result in massive fines from the Landlord and Tenant Board (LTB) of up to $85,000 CAD for corporations. This guide outlines the lawful, step-by-step process real estate investors must follow to assume occupancy of a tenanted property as of May 2026.
Step-by-Step Process for Evicting Tenants During a Sale in Ontario
Evicting a tenant for a purchaser’s own use is one of the most highly scrutinized processes at the LTB. The board heavily protects tenants against “bad faith” evictions. Here is the standard legal process real estate lawyers and paralegals strongly recommend.
Step 1: Include a Vacant Possession Clause in the APS
Your protection begins before you even buy the property. When drafting the Agreement of Purchase and Sale (APS), your real estate lawyer must include a strict “Vacant Possession” clause. This clause legally binds the seller to deliver the property empty on the closing date. However, it is vital to understand that if the tenant simply refuses to move, the seller cannot physically drag them out. If the tenant stays, you may have to delay closing or assume the tenant.
Step 2: The Seller Serves the N12 Notice
Once the APS is signed and all conditions are removed, you (the buyer) must formally request that the seller issue an eviction notice. In Ontario, this is the N12 Form: Notice to End your Tenancy Because the Landlord, a Purchaser or a Family Member Requires the Rental Unit. 📄
To qualify for this, you must legitimately intend to live in the unit yourself, or have your spouse, child, or parent move in. You cannot use an N12 if you plan to immediately flip the property, renovate it, or rent it out to new tenants at a higher price. The notice must provide the tenant with at least 60 days’ notice, and the termination date must align with the last day of their rental period.
Step 3: Pay the Mandatory Compensation
Under the RTA, a tenant being evicted via an N12 is legally entitled to one month’s rent as compensation. This compensation must be paid to the tenant before the termination date listed on the N12. A common dispute arises over who pays this-the buyer or the seller. Usually, this is negotiated in the APS, but ultimately, if the compensation is not paid, the LTB will automatically throw out the eviction application.
Step 4: File the L2 Application with the LTB
Serving the N12 does not mean the tenant will actually leave. The tenant has the absolute legal right to wait for a hearing at the LTB to challenge the eviction. Therefore, immediately after the N12 is served, an L2 Application should be filed with the LTB. This places you in the queue for a hearing. At the hearing, you will be required to submit a sworn affidavit proving your genuine intention to occupy the unit for at least one year.
| Requirement | Details for Purchaser’s Own Use |
|---|---|
| Who Can Move In? | The buyer, their spouse, their child, their parent, or a caregiver for these individuals. |
| Minimum Occupancy | The person moving in must live there for a minimum of 12 consecutive months. |
| Bad Faith Penalty | If caught re-renting or selling within a year, the LTB can order you to pay up to $35,000 CAD to the evicted tenant. |
How Much Does it Cost in Ontario?
Evicting a tenant legally requires a budget for both administrative fees and potential delays. 💵 As of May 2026, here are the anticipated costs in CAD:
- LTB Filing Fee: Filing the L2 Application costs $186 CAD.
- Paralegal or Lawyer Fees: Retaining an Ontario legal professional to draft the N12, file the L2, and represent you at the LTB hearing typically ranges from $1,500 to $3,500 CAD.
- Mandatory Tenant Compensation: You must pay the equivalent of one full month of the tenant’s current rent.
- Carrying Costs: If the tenant stops paying rent while waiting for the hearing, you must cover the mortgage and property taxes out-of-pocket during the delay.
How Long Does the Process Take?
Patience is mandatory for real estate investors in Ontario. The N12 legally requires a minimum of 60 days notice. However, if the tenant refuses to leave, securing a hearing date at the Landlord and Tenant Board is currently taking anywhere from 4 to 8 months depending on the region. After the judge issues an eviction order, it may take another 2 to 4 weeks to hire the Court Enforcement Office (Sheriff) to physically remove the tenant.
Frequently Asked Questions (FAQ)
Can I issue an N12 if the property is owned by a corporation?
Generally, no. In Ontario, an N12 for a purchaser’s own use can only be issued if the property is being purchased by an individual or individuals (not a numbered company or corporation), unless it is a family-owned corporation with very specific criteria.
What happens if the tenant refuses to let the appraiser inside?
Under the RTA, a landlord has the right to enter the unit to allow a potential purchaser or their agents (like appraisers or home inspectors) to view it. You must provide a formal 24-hour written notice. If the tenant physically blocks entry, you can file an application with the LTB, though this will delay your closing.
Can I evict a tenant just to do major renovations?
Not with an N12. If you are buying the property solely to gut it and renovate, you must use an N13 Notice. This process is much more complicated, requires building permits to be in place, and gives the existing tenant the right of first refusal to move back in at their old rent once renovations are done.
Can the tenant stop paying rent after receiving the N12?
No. The tenant remains legally obligated to pay their monthly rent right up until the day they move out. If they stop paying, the landlord can immediately serve an N4 Notice for Non-Payment of Rent and file an additional L1 application to evict them faster.
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