Purchasers who want vacant possession when there is a tenant in the home can give rise to many thorny issues. Tenants can’t be ousted for the asking, and vendor’s need to be weary about making promises to deliver vacant possession.
This case illustrates how one Vendor adequately protected himself quite well because he was able to show the court that he rejected prior offers that made vacant possession, free of the tenant, a term of the sale. Indeed, in the agreement under consideration, the vendor caused the vacant possession term inserted by the purchaser to be changed, so that it finally read, in part, as follows:
“The Buyer hereby authorizes and directs the Seller, and the Seller agrees, to give to the tenant(s) the requisite notices requiring vacant possession of the property for use by the Buyer or the Buyer’s immediate family. The seller agrees to deliver copies of the requisite notices to the Buyer immediately after service of the notices upon the tenant.”
When the closing came, and the tenant was still in the property, the purchaser refused to close, citing violations on the part of the vendor to tender vacant possession. The court ultimately concluded that the purchaser was wrong for not closing the deal: the Vendor did what he was supposed to do by delivering the requisite notices to the tenant, and there was no promise to deliver vacant possession on closing. Indeed, the closing date selected by the purchaser predated the latest day the tenant could remain in the property according the Residential Tenancies Act, 2006, S.O. 2006, c. 17. As stated by the court, “in other words, the tenants could not be required to leave prior to closing ….(and this doesn’t even)…. take into account the time required for the processes of the Landlord and Tenant Board (the “Board”) to take their course should the tenants refuse to vacate as required.”
The result may have been very different had the vendor actually agreed to provide vacant possession on closing.
Lees v. Ahmadi et. al., 2022 ONSC 1114
https://www.canlii.org/en/on/onsc/doc/2022/2022onsc1114/2022onsc1114.html