Income properties, laneway and in-law suites, and basement apartments can be excellent ways to supplement a mortgage, and they can be in high demand in Toronto. But if you own one of these types of properties, what happens when you want to sell? Here are some things to be aware of.
Can I sell the property?
Yes, you can sell your property if you have a tenant. However, the tenant has the right to continue to live at the property as long as their lease states, meaning that lease would be transferred to the new owner until it ends. This could be a benefit to some potential buyers, as they wouldn’t have to look for a new tenant and could continue to benefit from the income right away.
However, if the tenant is on a month-to-month lease, the new owners have the right to provide the tenant with 60 days written notice to move out—but only if the new owners plan to occupy the space themselves.
How do I inform my tenant?
There is no formal, legal process to follow to inform your tenant about plans to sell the property. However, the courtesy of letting them know in advance can help make the transition smoother, especially when the property is listed.
How do showings work with a tenant?
In order to show potential buyers the tenanted space, the tenant must be given 24 hours notice of showings, and the showings must take place between 8 a.m. and 8 p.m. The tenant does not have to vacate their space during showings.
Can I stage the tenanted space?
Though you can ask, you cannot insist that the tenant allows you to stage their space. But, they may agree to let you have the space cleaned, and you are able to take marketing photographs for the listing. While you don’t have the right to force them to declutter or rearrange anything, having a good relationship with your tenant can help make the preparation and selling process much smoother.