Listing the house does not end the tenancy
Selling an Ontario rental is not the same as ending the lease. Under section 37 of the Residential Tenancies Act, 2006, a tenancy ends only in the ways the Act allows. Under section 39, a landlord cannot simply take the unit back because an offer came in.
On closing, the buyer steps into the landlord's shoes unless the tenancy has already ended under the RTA. That is why vacant possession on a tenanted sale needs a plan before the agreement of purchase and sale is firm.
A Toronto real estate lawyer reads the lease, the unit count, and the vacant-possession wording early. Sale legal fees start at $1,999 plus HST. The tenancy process is a separate track from the land transfer.
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Two sale strategies: tenant in place or vacant possession
Most tenanted sales fall into one of two lanes.
Sell with the tenant in place. An investor buyer may want the rent, the last-month deposit, and the existing lease. The APS should say the buyer takes the tenancy, and the statement of adjustments should deal with prepaid rent and the deposit.
Seek vacant possession for an end-user buyer. That path usually means an N12 for purchaser own-use under section 49, a voluntary N11 (often called cash-for-keys), or a longer closing while the RTA process runs. Do not treat "the listing says vacant" as a legal ground to evict.
Purchaser own-use N12 under section 49
Section 49 is the sale-specific own-use route. The landlord serves Form N12 on the purchaser's behalf. LTB Interpretation Guideline 12 and the LTB forms page are the practical references.
The statute is narrow. There must be an agreement of purchase and sale in place. The residential complex must contain no more than three residential units, or the unit must be a condominium unit under section 49(2). Above three units in a non-condo complex, this route is not available.
The purchaser must, in good faith, need the unit for residential occupation by the purchaser, the purchaser's spouse, a child or parent of either of them, or a qualifying caregiver under section 49. The intended occupant must genuinely need the unit for residential occupation for at least one year. An affidavit or declaration of good faith goes with the L2 application.
Notice timing matters. The termination date must be at least 60 days after the N12 is given, and it must fall on the last day of a rental period or, for a fixed term, not before the end of that term.
Compensation under section 49.1 is one month's rent, or another rental unit the tenant accepts. That obligation sits with the landlord who served the notice, not with the purchaser. Pay it by the termination date on the N12. The LTB will not order eviction without it.
An N12 is a notice, not an eviction order. If the tenant stays, the landlord files an L2. Hearings can take months. Do not promise vacant possession by the N12 date in the APS.
Landlord own-use N12 under section 48 is a different path
Section 48 is for the landlord, the landlord's spouse, a child or parent, or a qualifying caregiver moving in. It is not a "sale" ground. Corporate landlords cannot use section 48 for personal use.
Compensation under section 48.1 is also one month's rent or an acceptable alternate unit, unless a later Bill 60 exception applies on the facts and the current statute. Check the live RTA before you serve.
Bill 60 note: check e-Laws before you serve
As of 8 September 2026, Schedule 12 of the Fighting Delays, Building Faster Act, 2025 adds a longer-notice exception to compensation under section 48.1 for certain landlord own-use notices. Order in Council 618/2026 names 21 September 2026 as the in-force day for that amendment.
When it is in force, the exception applies only if the notice is given on or after that day, the termination date is at least 120 days after the notice, and the termination date falls on the end of a rental period or fixed term. The Bill text amends section 48.1. It does not create the same 120-day waiver for purchaser notices under section 49.1.
Secondary summaries are not the statute. Read the current RTA on e-Laws before serving any N12.
Cash-for-keys is voluntary
Cash-for-keys is a negotiated deal. The tenant can refuse. There is no statutory "standard" dollar amount, and this page does not invent one.
If the parties agree to end the tenancy, document it with Form N11 (Agreement to End the Tenancy). If money changes hands, put the payment terms in a separate written agreement. Do not rely on a handshake or a text thread alone.
An N11 that is signed as a condition of getting the unit in the first place can be void under the Act. Timing and pressure matter. Get advice before you paper the deal.
Do not promise vacant possession before the RTA process is done
Promising vacant possession in the APS while the N12 or N11 path is unfinished is how sellers land in breach territory. Build timing into Schedule A before the offer is firm: a long closing, an extension right, a right to assign the tenancy to the buyer, or a clear "tenant remains" deal.
The closing process still needs keys, adjustments, and possession language that matches the tenancy plan. Seller closing costs and commission do not buy an eviction order.
Showings need written 24-hour notice
Under section 27(2), the landlord or an authorized registrant may enter to show the unit to a potential purchaser with written notice at least 24 hours before entry. The notice must state the reason, the day, and a time between 8 a.m. and 8 p.m.
That is showing access. It is not vacant possession.
Bad faith after an N12
If an N12 is given in bad faith and the intended occupant does not move in within a reasonable time after the tenant leaves, a former tenant may apply under section 57 on a T5. Remedies can include rent-differential compensation, moving costs, an abatement, general compensation, an administrative fine within the Board's monetary limits, or other orders the Board considers appropriate.
This page does not invent maximum fine figures. Read section 57 and Guideline 12 for the current remedial list.
Private sellers face the same RTA rules. A private sale does not skip the N12, N11, or vacant-possession timing problem.
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Zachary Soccio-Marandola
Real Estate Lawyer
Direct: (647) 797-6881
Email: zachary@socciomarandola.com
Frequently Asked Questions (FAQ)
Can I evict my tenant just because I listed the house?
No. Sale alone is not a ground to end a tenancy under the RTA. The tenancy continues on closing unless it ends under the Act. The buyer becomes the new landlord.
What is the difference between an N12 and an eviction order?
An N12 is a notice of termination. If the tenant does not move out, the landlord must apply to the Landlord and Tenant Board on an L2 and obtain an order. Hearing timelines can run past the N12 date. Do not treat the notice date as vacant-possession certainty.
Who pays the one-month compensation on a purchaser N12?
The landlord who served the notice. On a sale that is usually the seller. Section 49.1 puts that obligation on the serving landlord, not on the purchaser, unless the parties allocate it differently in their own contract.
Does Bill 60 let me skip compensation on a purchaser N12 with 120 days' notice?
Not on the text of Schedule 12 as enacted. The longer-notice compensation exception is written into section 48.1 for certain landlord own-use notices. Section 49.1 for purchaser notices was not given the same waiver in that Schedule. Confirm the current RTA on e-Laws before you serve, including the 21 September 2026 in-force timing for the section 48.1 change.
Is there a standard cash-for-keys amount in Ontario?
No. Cash-for-keys is voluntary. The tenant can refuse. Document any deal with an N11 and a separate payment agreement if money is paid. Do not treat informal ranges you heard online as a legal standard.