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Summary: When a tenant refuses to leave after a house is sold in Ontario, the sale changes nothing. The tenancy survives the transfer of title. Ending it takes a notice under the Residential Tenancies Act, 2006, usually a section 49 N12 served by the seller with at least 60 days' notice.
Can you evict a tenant in Ontario when the house is sold?
No. Selling is not a ground of termination. Section 37(1) of the Residential Tenancies Act, 2006 says a tenancy "may be terminated only in accordance with this Act," and nothing in the Act lists a sale as a reason.
Section 18 adds that covenants related to a rental unit run with the land, so on closing the buyer becomes the landlord on the tenant's existing terms. A tenant who refuses to leave is the seller's problem, which is why the gap between possession date and closing date has to be settled early.
If you're the tenant, the short answer is that you do not have to move out because the place was sold. Steps to Justice has the full picture.
What does a vacant possession clause commit the seller to?
A vacant possession clause in the agreement of purchase and sale (APS) is the seller's promise to hand the property over empty on closing. It depends entirely on someone else's behaviour.
A seller can serve every notice correctly and still arrive at closing with someone living in the house, because the Act lets the tenant dispute the notice and stay until the Landlord and Tenant Board (LTB) decides. Signing the clause does not make the tenancy easier to end. It makes the seller liable if it does not end in time, and it is one of the reasons deals fall through.
Our post on buying a tenanted property in Ontario covers the buyer's side, including assuming the tenancy instead.
Who can actually end the tenancy under the Residential Tenancies Act?
Section 49 is the only route connecting a sale to the end of a tenancy, and it works in a way most people get backwards. The purchaser must be the one who requires the unit in good faith. The seller, as the current landlord, serves the notice.
Section 49(1) lets a landlord, "on behalf of the purchaser, give the tenant of a unit in the residential complex a notice terminating the tenancy, if the purchaser in good faith requires possession." Section 49(2) does the same for a condominium unit.
The LTB's N12 form matches: it is headed "From: (Landlord's name)," the signature block offers only "Landlord" or "Representative," and there is no purchaser signature line. A buyer who does not yet own the property cannot end a tenancy.
Four conditions have to be met:
A signed agreement must already exist. Section 49 applies to a landlord "who has entered into an agreement of purchase and sale." The APS comes first.
The property has to qualify. Section 49(1) covers a complex of no more than three residential units; section 49(2) covers a condominium unit, whatever the size of the corporation.
A named person must intend to move in. The purchaser, their spouse, a child or parent of either, or a caregiver for one of them. An investor buying to re-rent does not qualify.
The notice period must be right. Section 49(3) requires at least 60 days, ending on the last day of a rental period or the end of a fixed term.
The person moving in must also swear a good-faith affidavit, and under section 69(2) the Board application has to come within 30 days of the termination date.
What is the tenant owed, and what defeats the notice?
Compensation is mandatory: one month's rent, or another unit the tenant accepts, paid no later than the termination date (sections 49.1 and 55.1).
Two details surprise sellers. Section 49.1(2) keeps that obligation with the landlord who served the notice, so it does not pass to the purchaser on closing. And the exemption that took effect on September 21, 2026 for landlords giving at least 120 days' notice covers section 48 notices only, where the landlord moves in themselves. A purchaser's own use notice always attracts compensation.
A former tenant also has one year from vacating to apply under section 57(1)(b) if the notice was given in bad faith and nobody named in it moved in. Orders run up to 12 months of the last rent charged, plus costs and a fine. The Advocacy Centre for Tenants Ontario sets out how tenants argue these cases.
How long does the Landlord and Tenant Board actually take?
Longer than a closing date. An N12 removes nobody by itself, and the form tells the tenant they do not have to move out if they disagree with it. If they stay, the landlord files an L2, the Board application asking for an eviction order, at $201, or $186 through the Tribunals Ontario Portal.
The LTB's guidance on its application and hearing process says most application types other than straightforward rent-arrears files are, on average, scheduled within five to seven months of the date the application is received.
The notice cannot start until the APS is signed and must end on a rental period boundary, so 60 to 90 days is the floor. Add five to seven months to a hearing, then a decision, then enforcement by the sheriff's office, for which no service standard is published. A typical closing date does not survive that sequence.
What is cash for keys, and what does an N11 do?
Cash for keys is the industry name for paying a tenant to leave voluntarily. It is not a legal category; the phrase appears nowhere in the Act or on the LTB's forms. Because the formal route is slow, most tenanted sales that deliver on time do it by agreement instead.
The document that carries it is the N11, Agreement to End the Tenancy. Both parties sign it and it records a single termination date. Outside two narrow exceptions on the form, a landlord cannot require a tenant to sign one.
N12 notice | N11 agreement | |
What it is | Notice ending the tenancy for the purchaser's own use | Mutual agreement to end the tenancy |
Who signs | The landlord only, on behalf of the purchaser | The landlord and the tenant |
When it applies | Complexes of three units or fewer, and condo units | Any tenancy |
Minimum timeline | 60 days, plus a Board hearing if disputed | Whatever date the parties agree on |
Payment | One month's rent, required by section 49.1 | Negotiated; no statutory amount |
Put any payment in writing. A signed N11 does not empty the unit on its own, but if the tenant overstays, the landlord's route back is an L3 under section 77, which the Board can decide without notice to the tenant and without a hearing. That is much faster than a contested N12.
Can a landlord show an occupied house while it is for sale in Ontario?
Yes, on 24 hours' written notice. Section 27(2) lets a landlord, or a registered broker or salesperson with the landlord's written authorisation, enter a rental unit to let a potential purchaser view it, at a time between 8 a.m. and 8 p.m.
The tenant's consent is not required once proper notice is given. Equally, nothing in the Act requires the tenant to leave during a showing or to tidy the unit, so weekend open houses and same-day showings are hard to run.
What happens on closing day when a tenant refuses to leave?
The tenancy question becomes a contract question. The seller promised vacant possession and cannot deliver it, which is a failure to complete on the seller's side. The tenancy carries on regardless; what is in play now is the APS, and both lawyers work through a short list of options.
Extend the closing date. The most common outcome, and the only one that needs both sides to agree. The mechanics are in our post on extending a closing date.
Close with a holdback. The buyer completes, and an agreed amount stays in the seller's lawyer's trust account until the tenant is out.
Close with an abatement. A price reduction reflecting what the buyer is actually receiving, which is a property with someone living in it.
Refuse to close and claim damages. The buyer treats the agreement as terminated, the deposit comes back, and the buyer pursues the seller for losses.
Close and sue for damages. The buyer completes, then pursues the seller for the cost of a tenancy they did not agree to inherit.
The exposure runs one direction. The deposit is the buyer's, and a seller who cannot complete is not entitled to keep it. Beyond that, the seller is exposed to the buyer's direct losses: temporary accommodation, storage, a second move, and an expired rate hold. The wider set of remedies is in seller doesn't close on time in Ontario.
The best defence is finding out early, which is what the final walkthrough is for. Better still, settle possession before the agreement is firm and have the clause reviewed before you sign it.
Frequently asked questions
Does my tenant have to leave the unit during showings?
No. Nothing in the Act requires a tenant to vacate for a showing. The landlord or an authorised agent may enter on at least 24 hours' written notice under section 27(2), between 8 a.m. and 8 p.m.
I'm the buyer. Can I serve the N12 myself?
No. Section 49 gives that power to the landlord, acting on behalf of the purchaser. The N12 has no purchaser signature line. Until closing, the buyer is not the landlord.
Is there such a thing as a notice of vacant possession in Ontario?
No. Vacant possession is a promise in the agreement of purchase and sale between seller and buyer. Ending the tenancy is a separate step under the Act, done with an N12 or a signed N11.
My property has four units. Can I give an N12 for the buyer?
Not unless it is a condominium unit. Section 49(1) covers a complex of no more than three residential units; section 49(2) covers a condo unit whatever the building's size.
Do I still owe compensation if I give more than 120 days' notice?
Yes. The exemption in force since September 21, 2026 covers only a landlord's own use notice under section 48. A section 49 notice always requires one month's rent, or another unit the tenant accepts.
About the author
Joel Fox is a co-founder and COO at Ownright. He helps run the firm's day-to-day work on Ontario residential closings, refinances, and sales, and writes regularly to demystify the parts of a transaction that most homeowners only encounter once or twice in their lives.
At Ownright, we focus entirely on Ontario residential real estate law, handling closings, sales, and refinances through a digital platform staffed by licensed Ontario lawyers. That includes reviewing a vacant possession clause before you sign it. We do not act at the Landlord and Tenant Board or serve notices of termination. You can start your closing online or get in touch with any questions.
Legal references: Residential Tenancies Act, 2006, S.O. 2006, c. 17, ss. 18, 27, 37, 48, 49, 49.1, 55.1, 57, 69, 71.1, 72, 77; Landlord and Tenant Board Form N12 (Notice to End your Tenancy Because the Landlord, a Purchaser or a Family Member Requires the Rental Unit); Landlord and Tenant Board Form N11 (Agreement to End the Tenancy); Condominium Act, 1998, S.O. 1998, c. 19.
Important note: This article is not legal advice. No one should act, or refrain from acting, based solely on the information in this post or any linked materials without first seeking appropriate legal or professional advice.
