Short answer
No. A sale does not automatically end a tenancy. Vacant possession depends on the agreement, the tenancy, a valid legal ground and completion of the required process.
The buyer or owner’s concern
The buyer plans to move in on closing day or renovate immediately, while the offer simply says “vacant possession” and the tenant has not agreed to leave or received a valid notice.
What Ontario’s official guidance says
LTB guidance explains when a seller may give an N12 after entering an agreement of purchase and sale for an eligible property because the purchaser or qualifying family member genuinely requires the unit for residential occupation.
What the rule does not guarantee
An N12 is a notice—not an eviction order—and the tenant may remain until leaving voluntarily or an enforceable LTB order is executed. Fixed-term dates, property size, qualifying occupants, notice and compensation requirements matter.
A practical Ontario example
Illustration only: A family buys a four-unit property intending to occupy one unit. The legal purchaser-use rules may differ from a condominium or a property with no more than three residential units; the promise of vacancy must be reviewed carefully.
Practical next steps
Make vacant possession and risk allocation explicit with the lawyer and realtor. Do not give notice yourself before becoming the landlord. Keep temporary housing and financing contingencies if occupancy timing affects the mortgage, insurance or closing.
Questions to ask before relying on the rent
- What is the current lawful rent and when was it last increased?
- Is the unit guideline-covered or genuinely exempt?
- Do the lease, notices, ledger and seller’s statements agree?
- Does the purchase require vacant possession or future higher rent to remain affordable?
- Which issue needs a lawyer or licensed paralegal before conditions are waived?
Rajiv’s broker perspective
A lender’s rental worksheet and Ontario tenancy law answer different questions. The lender may recognize only part of the rent, while the owner may also be unable to increase rent or obtain vacancy on the expected date. I would qualify the mortgage using verified lawful rent, test vacancy and repair reserves, and compare A, alternative/B, MIC or private options only after the legal occupancy assumptions are confirmed.
Related: Real Estate Centre · Mortgage Knowledge Centre · Updates & Rules Centre
Buying or refinancing a tenant-occupied property?
Send Rajiv the property type, lawful rent, lease dates and intended occupancy. He can test the mortgage using realistic rental assumptions and identify when independent landlord-tenant advice is needed.
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