How can I complete a private sale of a residential home without disturbing my current tenants ?

by Bob Scott
(Welland Ontario )

Hi Guys,

Hope you can help me with this situation that I am attempting to deal with.

I purchased my 5th residential rental home last February. I screened several prospective tenants and finally decided on a young couple. We signed a 1 year rental agreement with the tenants that started on July 1st 2012.

While showing this home to potential tenants the question had come up on a couple of showings of would I sell the property and if so for how much? Being that I own and operate a car dealership I always have a sell price in mind so I gave them a price. Shortly after (1 month) one of the potential tenants that we did not select e-mailed me explaining that she was pre-approved for a mortgage for that house in the amount that I had given her.

From what I understand she can only be pre-approved on paper for the mortgage for 120 days prior to the closing date, and being that my current tenants have an agreement with us that expires on July 1st 2013, I cannot issue the N12 form until 60 days prior to the rental agreemnt expiry.

My question to you is should I just give the potential purchaser my lawyer's information so that she may send him an offer to purchase or should I attempt to secure some type of deposit myself and create my own offer to purchase in between the 120 days (March 2013) and the 60 day notice for the tenants (May 2013).

Some other people in the real estate business are telling me this is unethical to attempt to secure a deposit from the purchaser.

The problem being is this home was never publically listed for sale and I do not want to lose my tenants that plan on staying for another four years.

I am also afraid of the deal falling through after I have already given my tenants their notice and could potentially loose $ 16,500.00 rental income per year. I have up loaded a couple of pics of this older style home.

Comments for How can I complete a private sale of a residential home without disturbing my current tenants ?

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Jan 29, 2013
RE: How can I complete a private sale...
by: Tom Karadza

Thanks for the question!

From my experience you only have to give the tenants notice once you have a firm deal. So unless the deal firms up you won't need to mention anything.

Just call the Ontario Tenant Board to verify or Google "Landlord Self-Help Centre" in Ontario ... they offer great free advice on these matters. But I think you're in the clear.

Also, I would definitely use a lawyer to draft up your private deal and walk you through the steps of holding the deposit.

Hope that helps!!

Tom.

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