Surprise! There's a tenant in the house I just bought: Ask Joe
I recently bought a house in Windsor (I’m in Toronto). It has a spacious basement that I intended to use for storage but just discovered there’s a long-term tenant living there. What can I do?
I’m sorry to hear the purchase didn’t work out as you intended. Regardless of whether you decide to sell the property or keep it, you should remember that tenants have rights and you don’t want to violate them. Since you are now a landlord, you may wish to check out the Landlord and Tenant Board website to better understand your own rights and responsibilities.
You also need to know if the property has been zoned for a multi-unit dwelling and if the unit complies with the building, fire and electrical safety codes. If an inspector were to examine the apartment and discover it doesn’t comply with the local bylaws or provincial safety codes, they could order you to bring it into compliance, which may involve the expense of taking out building permits and having the necessary work done. If you fail to do so before the assigned deadline, you could face significant fines or jail time.
Even if it was the previous owner who neglected to take these steps, you are now responsible for the property.
If you’re thinking about selling the home, I recommend working with a lawyer who understands landlord and tenant issues and with a real estate salesperson who has handled similar transactions. There are some rules in place about taking photographs of the unit, and providing adequate notice to the tenant before a showing can take place during approved hours.
You mentioned that you just found out about the tenant. Please don’t take these questions the wrong way, but did you actually visit or inspect the property before you made your offer? Did you arrange the sale through a real estate brokerage? Did you sit down with a registered salesperson to discuss either your needs or your plans for the home? Was there a mention of a tenant in the property’s listing information, and is there a chance you might have missed it?
One of the four key tips the Real Estate Council of Ontario provides to consumers is to be an active participant in the buying or selling process. Your salesperson can help you find suitable properties, provide an analysis of market trends and home prices, create a buying strategy, and formulate the right questions for the seller’s representative (among other services), but you have a responsibility to perform your own due diligence when you buy a home.
In practice, that means being open and honest with your salesperson about your needs and financial situation, personally visiting and researching properties and neighbourhoods, reading home inspection reports and other important documents, and asking questions.
If you have a question for Joe about the home buying or selling process, please email .
Joe Richer is registrar of the Real Estate Council of Ontario (RECO) and contributor for the Star. Follow him on Twitter: @RECOhelps