If you are thinking of selling your home this year and a tenant currently occupies it, is it better to end the tenancy before putting your home on the market?

Let's look at your obligations and rights as a landlord if you are trying to sell your home today and it is occupied by tenants. 

1. You have to give the tenant at least 24 hours' notice before you can show the home to a prospective buyer.
2. You can only show the property between 8 a.m. and 8 p.m.
3. You cannot prevent the tenant from being present when the property is being shown to or inspected by buyers.
4. You may be liable for damage claims if your tenant states that buyers either damaged or stole some of their belongings.
5. You cannot give notice to terminate the tenancy until you have a signed agreement of purchase and sale with a buyer.
6. You have to give your tenant 60 days' notice to vacate.
7. If your tenant does not vacate, you are looking at a tenancy board application that could take an additional two months.

I always advise my sellers to do their best properly "stage" their home for potential buyers. This will involve making some minor repairs to the home as well as arranging the furniture and contents to make the home show better.  Experts in staging recommend that you first de-clutter the home, remove oversized furniture and arrange the space to make it most appealing to potential buyers. The problem is that as a landlord, you have no right to order your tenant to de-clutter their rental space. Unfortunately, many tenants may deliberately try and make the home look messy or say negative things about the home during any home visit to discourage potential buyers from putting in offers.

Keep in mind that some tenants are exceptionally agreeable.  If you have a good relationship with your tenant, you can obtain the agreement from your tenant to perhaps waive their right to receive 24 hours' notice and just let potential buyers in when requested. They may also co-operate to let you properly stage the home as well as make diligent efforts to find another place to live so that you will be able to give an empty home to your buyer. 

The best way to ensure that you will have no problems from any existing tenant is to pay them an incentive to leave before you even put the property up for sale. The amount of the incentive will vary, depending on how easy it is for the tenant to find alternate accommodation. The guideline is about one month's rent or payment of all or part of the tenant's moving costs. I know that many sellers are against paying any incentive as a matter of principle. I would remind sellers that it is not about the principle, it is about obtaining a higher sale price for your home with much less stress. By paying your tenant an incentive to leave before you put your home up for sale, you can ensure that you will have no issue when properly preparing your home for sale or with allowing prospective buyers through.

Furthermore, your home will be empty at closing which is what buyers expect to receive. The worst case scenario is that your tenant refuses to leave, the deal may have to be extended, and there is a chance that the new buyer cannot make arrangements for their financing to be extended. Then the transaction falls apart with a potential lawsuit.