Short answer
A former tenant can bring a T5 application alleging bad-faith termination. The LTB may order financial remedies and can find the landlord, purchaser or both responsible depending on the facts.
The buyer or owner’s concern
A buyer sees vacant possession as a way to reset below-market rent, intending to re-rent shortly after closing rather than occupy genuinely.
What Ontario’s official guidance says
LTB T5 guidance addresses claims where an N12 was given for purchaser occupation but the purchaser did not move in within a reasonable time or the notice was otherwise given in bad faith.
What the rule does not guarantee
A later change in circumstances is not automatically bad faith, but it should be well documented. Mortgage pressure, a lower appraisal or a more profitable rental opportunity does not retroactively make a false original intention acceptable.
A practical Ontario example
Illustration only: A purchaser signs a declaration of intended occupation, closes and immediately advertises the unit at a higher rent. That sequence can become strong evidence in a bad-faith claim.
Practical next steps
Use purchaser-use termination only for a genuine, supportable occupancy plan and keep records of unexpected changes. If the economics require market rent rather than owner occupancy, price the property as tenanted or negotiate a lawful alternative before buying.
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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